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Nigeria, Ghana, others to integrate capital markets

By on March 7, 2015

Barring any unforeseen contingencies, the capital markets of countries in the West African sub-region will be integrated by the first quarter of 2016, the Chairman, Securities and Exchange Commission, Mr. Suleyman Ndanusa, has said.

Ndanusa made this known while speaking with journalists on Thursday in Abuja shortly after the opening session of the fifth meeting of the West African Capital Markets Integration Council.

The two-day meeting, which is being attended by delegates from all the countries in the sub-region, was convened to review the progress so far made in the actualisation of the objective as well as proffer solutions to some of the impediments to integration.

Some of the reports to be considered at the meeting are the report on the acceptability of foreign held securities as collateral for bank loans; double taxation and the report on the guidelines for capital raising across the sub-region.

Ndanusa, who expressed satisfaction with the progress so far made in the integration process, said significant achievement had been recorded in two out of the three phases required for capital market integration.

The three are the direct access market phase, qualified West African stockbroker phase and capital market phase, which is the ultimate.

Ndanusa said, “According to the timetable, by the end of 2015, we should have substantially gone through all the stages. We have three stages and we attained stage one in April 2014; we are working towards stages two and three.

“So obviously, latest by the first quarter of 2016, we should have attained the three stages for integrating the capital markets in West Africa.”

Asked if the integration would not be affected by the lack of a single currency for the sub-region, he said this was currently being looked at by the West African Monetary Union.

“There is a technical committee working on this issue made up of the central banks of the participating countries for this market. We are working with the ministries of finance, and so by the time we get to the level of full integration, that issue would have been resolved,” Ndanusa added.

He said integrating the markets would not only empower the region to be a formidable force to other emerging markets, but would also tackle the challenge of depth and liquidity.

This, the SEC chairman added, would help create a bigger market for both local and foreign investors.

The Chairman, WACMIC, Mr. Oscar Onyeama, called on the technical committee members of the council to ensure that the implementation continued and that the markets were positioned to play a critical role in development across the sub-region.

Asked how the integration would boost the economies of the respective member states, Onyeama, who is also the Chief Executive Officer of the Nigerian Stock Exchange, said with a population of over 300 million people, combined Gross Domestic Product of $600bn and a landmass bigger than the European Union, the region would witness improvement in its GDP.

He listed some of the impediments of integration to include company law issues, free movement of foreign exchange across the sub-region and free movement of people.

“We also have technical challenges such as harmonisation of rules, and we are benchmarking all of these rules with global best standards. But for us, the biggest challenge is financing in terms of how do we pay for all of these,” he added.

 

[Punch]