Edgar Tsimane
12 January 2009
Africa is not ready to have its own stock exchange, according to Martin Makgatle of Motswedi Securities.
"I'm not convinced that Africa can succeed because stock exchange rules and regulatory issues are not the same throughout the continent" because the continent's stock exchanges are at different levels, Makgatle says.
Makgatle was speaking to Monitor Business ahead of the extraordinary conference of African economy and finance ministers to be held in Ethiopia on Tuesday which is expected to discuss proposals for a continental investment bank and stock exchange to promote development.
He says the continent must standardise stock exchange regulations first. "The Johannesburg Stock Exchange is more advanced and liquid than any other in Africa. If we are to have a continental stock exchange, it will create a situation where smaller markets are swallowed up by bigger ones because trading will migrate to bigger markets."
Reuters quotes AU Commissioner for Economic Affairs, Maxwell Mkwezalamba, as saying "the extraordinary conference of African ministers of (the) economy and finance meeting in Addis Ababa on January 14, will discuss recommendations to set up an African investment bank and stock exchange, which would help mobilise resources for the continent's development." Mkwezalamba is also quoted as saying the ministers will also look at new ways of funding the organisation, which is proposing a budget of $170 million this year. Just over a quarter of its funding comes from international partners.
The ministers are also expected to review proposals for alternative sources of funding for the pan-African organisation such as levying taxes on all goods coming from outside Africa, African airline tickets and on insurance premiums.
The Minister of Finance and Development Planning, Baledzi Gaolathe, will not attend the Tuesday conference. His office says he is busy putting his budget speech together to be ready when Parliament opens next month, according to Dr Taufila Nyamadzabo, the Secretary for Economic and Financial Policy.
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