A random assortment of dark wood desks and chairs crowd the room. The tatty carpet is no longer glamorous but it is still just about red. A big-handled bell sits on a centre table.

Welcome to the Sierra Leone Stock Exchange. Number of stocks traded: one.

Housed inside Sierra Leone’s central bank, the rules of engagement are less clear-cut than the little glittery letters that pick out the words Sierra Leone Stock Exchange on the swing door.

“We start on Monday at 10am,” says a man inside the trading room.

But it’s just after 10am on Wednesday now, why isn’t there any trading?

“No, only on Monday at 10am.”

The Sierra Leone Stock Exchange gives new life to the notion of illiquid. Trading is open for “an hour or so”. If there’s “a lot of demand” sometimes it opens on Thursday too. Strong demand is anything above about six trades a day.

After all, the only listed company, for now, is the Rokel Commercial Bank. Established as Barclays Bank in 1917, the government took it over when it shrank to a single branch during the country’s devastating 1991-2002 civil war and later made 49 per cent public. In the next few weeks, the final 51 per cent stake – worth about $5m – is due to list on the stock market.

“The stock market was established on basis of the privatisation programme of Sierra Leone, which has been very very slow in coming about,” says Jacob Kanu, managing director of First Discount House, one of the country’s two only brokerages. “It’s just now beginning to come up.”

Rokel is the first of 24 massively underinvested public enterprises, dealing with everything from housing and roads to airports and the lottery, which have been slated for privatisation since 2002.

That the exchange exists at all is a feat in persistence. The decision to start one was first taken in 1999, at the height of the civil war that destroyed the country. It was declared “launched” in 2007 without a building to its name and was “commissioned” in 2009 with little immediate action but plenty of private sector gusto.

Kanu says trading will become more frequent after the rest of RCB lists, however, and expects the share price to shoot much higher than its current 7.10 Leones (£0.001). “That will trigger a lot of trading,” he says. “When that comes on, we are talking about a tremendous price increase, and so many others will follow suit.”

Solomon Samba, chairman of the stock exchange, says three more companies drawn from the worlds of banking, insurance and logistics are expected to list in the next year. “It starts small, but it will grow,” he says. After all, even Nigeria started somewhere.

He says transparency requirements are discouraging some companies from considering the capital markets at all, however. “Companies have to disclose a lot of things; that is why some companies are not too keen to go on the exchange,” said Samba. Corruption and a difficult business environment have long hampered Sierra Leone, one of the world’s least developed countries.

Finance minister Samura Kamara says many Sierra Leoneans still don’t understand corporate business or what’s required of a stock exchange: “Many of our businesses are family-orientated or single proprietors; there’s a lack of trust and confidence in the market”.

He says state policy in the tiny $3bn economy of 6m people, most of them poor, hopes to educate citizens about the benefits of shareholding and to lure more companies with tax benefits. New local content laws, under development, may also stipulate foreign investors must list part of their local business on the exchange to make profits available to more Sierra Leoneans. A handful of international companies, some listed on AIM, are already pumping money into everything from iron ore mines to sugar cane plantations.

In the longer term, Samba says the exchange can hope for cross-listings and, eventually, to make the most of regional integration. For now though, Omotunde Johnson, country director for the International Growth Centre at the LSE, says capitalisation and liquidity “is unlikely to be significant for the foreseeable future”.

Until then, it’s still Monday, 10am.

Related reading:
Sierra Leone’s war trauma gives way to resource bonanza
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Twelve days in west Africa: Accra to Freetown
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Sierra Leone diamond miner set for HK listing
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