Nigeria, Ghana, Côte d’Ivoire move to integrate capital markets

The Ghana Stock Exchange (GSE), Nigerian Stock Exchange (NSE), and Bourse Régionale des Valeurs Mobilières (BRVM) of Côte d’Ivoire have agreed to integrate their capital markets into West African Securities Markets.

This was part of the decision of regulators of capital markets in the region in a meeting held recently. To this end, an executive committee made up of stakeholders of the West African securities markets will be raised which will comprise CEOs of all three Exchanges, one representative from each regulator of the three markets, a representative from each Central Securities Depository (CSD), and a broker/dealer representative from each of the Exchanges. Four organisations were granted observer status, namely ECOWAS, the West African Monetary Institute (WAMI), Union Economique et Monétaire Ouest-Africaine (UEMOA) and the Sierra Leone Stock Exchange.

Sources at the Nigerian Stock Exchange said that the executive committee is tasked with overseeing the pre-integration and implementation phases of the initiative.

“Their major function is that of a policy-setting and decision-making body. They are given the responsibility of approving all issues concerning the integration of the West African securities markets and coordinating with the relevant government and regional bodies to ensure the success of the project. The executive committee will be instituted in April 2010, when they will hold their first formal meeting,” said the NSE source.

According to the source, “In 2007, a technical committee was formed to perform due diligence on the three regional exchanges and their markets, and to make recommendations on how the integration can be effected. Several reports on legislation, exchange operations, listing requirements, broker/dealer requirements, reporting requirements, settlement and more have been delivered by the technical committee for review and action by the executive committee. They will be expected to deliberate on these reports during the meeting next month.”

It would be recalled that, last December, at the 13th annual African Securities Exchanges Association (ASEA) conference in Abuja, the sub-regional stock exchanges signed a Memorandum of Understanding (MoU) to seal their commitment to the project that has been undergoing feasibility studies since 2007. “We have seen the benefits of regional integration in the global capital markets, and Africa is no different,” said Ndi Okereke-Onyuike, director general of NSE.

“Our markets may be younger than some, but it is for this reason we are looking to drive growth through strategic partnerships. As our economies continue to develop, it is important that viable businesses are able to access capital; it is equally important to provide a safe and effective marketplace to support wealth creation and to offer product diversity to investors.

“To-date, we have identified the broad objectives of this initiative, and the strategies that will help us execute the vision,” said Ekow Afedzie, deputy managing director of the Ghana Stock Exchange.

“In bringing the regulators and ECOWAS together, we took the first step towards implementing a very powerful and far-reaching initiative. With an executive council in place, we can now begin the process of creating a unified market in West Africa. We are confident we are on our way to achieving this vision and goal.”