Tom Mogusu
8 September 2007
Nairobi — The International Finance Corporation (IFC) has launched a multi-million shilling project aimed at transforming African financial markets.
IFC will also ask African governments to use bond markets to raise infrastructure funds on a long-term basis.
The Efficient Securities Markets for Institutional Development (ESMID), is already being rolled out in Kenya, Uganda, Tanzania, Rwanda and Nigeria.
It will cost the corporation an estimated $5.5 million and is aimed at deepening the bond market.
"This project will be implemented over the next three years," Mr Evans Osano, a Regional Manager with IFC, said on Friday.
"Through this project, we want to see how the bond market can be used to fund housing and infrastructure projects in Africa."
The project comes at a time when Kenya and other African countries are grappling with the needs of their growing economies and the need to improve infrastructure.
East African nations have been growing at an average rate of 5 per cent over the past four years, but poor infrastructure has had a negative impact on the growth.
While the growth has been fuelled by service industries, there is demand for governments and the private sector to play a bigger role in infrastructure development.
Osano said the project was introduced after a research by IFC found out that Africa would need an estimated $250 billion over the next decade to meet growing infrastructure needs.
Osano was speaking in Nairobi during a day seminar on emerging markets sponsored by Strathmore University.
Other speakers included the Central Bank of Kenya Governor, Prof Njuguna Ndungu, presented a paper on monetary policy and capital markets.
Others speakers included Mr Jimnah Mbaru, CEO, Dyer & Blair Investment Bank and Chairman of Nairobi Stock Exchange (NSE) and Dr James McFie, a lecturer at Strathmore University.
The project would also seek to improve operating financial environment in the five target nations.
"We shall be looking at doing a market diagnosis in Nigeria so that we understand that region."
Ndungu said there was room for more financial reforms in the country.
"The financial markets follow economic performance in the initial stages, but over the last few years, we have seen the sector moving away from bank domination to well functioning securities market.
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