Shareholders vs. Stakeholders: The Conceptual Difference

Mr Abdoulie M Touray © Askanwi

By Ambassador Abdoulie M Touray,

Shareholders:

Shareholders are owners of a company. They hold equity (shares) in the institution and therefore possess specific rights and financial interests.

Key characteristics:

• Own a portion of the company’s share capital

• Receive dividends when the company makes profits

• Have voting rights at Annual General Meetings (AGMs)

• Can influence corporate governance through board representation

• Benefit from capital appreciation when share value rises

In essence, shareholders are risk-bearing investors whose returns depend on the performance of the company.

Stakeholders:

Stakeholders are individuals or groups affected by the operations of a company but who do not necessarily own it.

Examples of stakeholders include: customers, employees, government regulators, suppliers, local communities, depositors in banks and the broader national economy

Stakeholders benefit from the activities of a company but do not share in ownership, profit distribution, or governance rights.

Application to the Gambian Banking Sector

The Gambian banking system has historically been dominated by foreign-owned financial institutions. Examples include subsidiaries or affiliates of regional or international banking groups.

In such a system:

• Gambians may deposit money, work for the banks, or use their services.

• However, most Gambians do not own shares in these institutions.

Therefore, the majority of citizens remain stakeholders rather than shareholders.

They are affected by lending policies, interest rates, employment opportunities and financial inclusion, but they do not participate in profit distribution or ownership control.

Policy Intervention by the Central Bank

The policy direction taken by the Central Bank of The Gambia to require banks to float approximately 20–25% of their share capital to Gambians is a strategic financial sector reform.

This policy serves several important purposes:

• Economic Inclusion

• It enables Gambians to own part of the banking sector, transforming citizens from passive stakeholders into active shareholders.

• Local Wealth Creation

• Dividends from profitable banks can now circulate within the domestic economy, benefiting Gambian investors.

• Domestic Capital Formation

• Local investors gain opportunities to participate in high-value financial assets previously dominated by foreign investors.

Corporate Governance Participation

Gambian shareholders can influence the following: board representation, governance standards, long-term strategic direction, and financial market development.

Public share offerings create the necessary liquidity and instruments for capital markets.by lending

Strategic Importance for the Gambia Stock Market

This policy also provides a strong foundation for the development of the Gambia Stock Exchange.

Stock exchanges require listed companies with tradable shares. Banks are typically among the most stable and attractive companies for listing.

By requiring banks to float shares: High-quality financial stocks become available, investors gain confidence in the market, pension funds and institutions have investment instruments, and Liquidity begins to develop in the capital market

Historically, in many countries Banks were among the first companies listed on stock exchanges. Examples include markets in Nigeria, Kenya, Ghana, and South Africa.

Thus, the Central Bank policy effectively creates anchor listings for the stock exchange.

Strategic Impact for The Gambia

The long-term national benefits include:

• Democratisation of Capital Ownership

• Citizens become participants in wealth creation.

• Deepening of Financial Markets

• The stock exchange gains credible listed institutions.

• Reduction of Capital Flight

• Profits partly remain within the Gambian economy.

• Strengthening of National Economic Sovereignty

• Local investors gain influence in strategic financial institutions.

Concluding Perspective

The distinction between stakeholders and shareholders is therefore not merely academic — it is central to economic empowerment.

When citizens move from stakeholders → to shareholders, they transition from:

• Users of the financial system

• Owners of the financial system

The policy initiative by the Governor, Board, and Management of the Central Bank of The Gambia therefore represents a forward-looking reform that simultaneously:

• promotes inclusive ownership

• strengthens financial sector governance

• and accelerates the operationalisation of the Gambia Stock Exchange.

It is indeed a commendable step toward building a broad-based ownership economy in The Gambia by the Governor, Board & Management of the Central Bank of The Gambia and endorsed by the Government.

Respectfully submitted, Ambassador Abdoulie M Touray, President of the SaHel Knowledge Campus Think Tank (SKCTT)

7th March, 2026

Watch Askanwi’s exclusive interview with Ambassador Touray on the Gambia’s stock exchange market for more details.