Webinar Report: Connecting African Capital Markets
The Making Finance Work for Africa (MFW4A) partnership, hosted by the African Development Bank, and the African Securities Exchanges Association (ASEA) have provided a recent progress update on the African Exchanges Linkage Project (AELP), which aims to connect Africa’s leading securities exchanges and boost cross-border investment flows.
The AELP is a joint initiative of the Bank and ASEA involving seven leading African securities exchanges. AELP is funded by the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund, one of the Bank’s bilateral funds.
The updates were given during a virtual webinar held on 26 February. Among the AELP milestones discussed during the event were the establishment of six criteria to use in assessing the candidacy of exchanges wishing to join, establishment of a project management office and rollout of a communications program about the initiative.
The webinar was held as the historic Africa Continental Free Trade Area agreement (AfCFTA), entered nearly three months of operation since 1 January.
Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfcFTA) Secretariat, and one of the main speakers said the agreement aimed to double intra-African trade by 2035 and support industrial development to make Africa competitive. “This is why it is so important that we confront these challenges together of directing investment to industrial development for Africa.”
Mene also acknowledged the importance of capital markets in general and the African Securities Exchanges Association in particular. “I look forward to a partnership where both will confront this challenge of mobilizing investment for productive sector capacity on the African continent,” he said.
Other speakers during the webinar included Felix Edoh Kossi Amenounvé, President of the African Securities Exchanges Association (ASEA); Stefan Nalletamby, Director, Financial Sector Development Department, African Development Bank; Willie Njoroge, acting Secretary General of African Stockbrokers and Securities Dealers Association (ASSDA) and AELP Project Manager Tom Minney.
Minney provided an update on the ongoing procurement of an order-routing technology platform, the AELP Link, which will make it easier for an investor in any participating market to buy and sell securities listed on other participating exchanges.
The seven AELP exchanges are: Bourse Régionale des Valeurs Mobilières (integrating the exchanges of Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo); Morocco’s Casablanca Stock Exchange; the Egyptian Exchange; the Johannesburg Stock Exchange, the Nairobi Securities Exchange; the Nigerian Stock Exchange and the Stock Exchange of Mauritius. Collectively, AELP covers 14 countries, 1,055 African companies and a market capitalization of $1.2 trillion, or 95% of the market capitalization of all African exchanges.
The initiative, which advances the African Union’s Vision 2063 directive regarding the free flow of investment and capital, aims for concrete progress to support economic development, jobs, industrialization and infrastructure.
“The African Exchanges Linkage Project will support African corporates in raising capital through issuances across multiple jurisdictions, leading to increased domestic and foreign institutional investors’ participation in African capital markets, said Nalletamby. “The African Development Bank supports the emergence of well-regulated, deep, and liquid capital markets with diverse product offerings.”
For more details on this session’s content, the event recording is available below. The webinar presentation can also be downloaded via this link.