The African Development Bank, working with the African Securities Exchanges Association (ASEA), hosted the first capital market stakeholders roundtable on the African Exchanges Linkage Project (AELP) at the Bank's headquarters in Abidjan, Côte d'Ivoire on 24 April, 2019.
The AELP is a joint initiative by the Bank and ASEA to facilitate cross-border trading and settlement of securities across participating bourses in Africa. It also seeks to unlock Pan-African investment flows, promote innovations that support diversification needs of investors, and address the lack of depth and liquidity in Africa's financial markets.
The one-day meeting marked the inaugural working session of key players across African capital markets to discuss the implementation of the initiative, which in November 2018, received a grant of US$980,000 from the Korea-Africa Economic Cooperation fund via the Bank.
In his opening remarks, Pierre Guislain, Vice-President, Private Sector, Infrastructure and Industrialization of the Bank said: "The partnership between us and ASEA complements the Bank's interventions towards deep and resilient capital markets in Africa. The African Exchanges Linkage Project will contribute to a wider financing pool for African corporates and SMEs and help close Africa's infrastructure deficit, estimated at US$67-107 billion annually. Indeed, the Continent needs deep, liquid and linked Capital Markets that will enable accelerated mobilization of domestic resources and incentivize private financing of infrastructure".
ASEA President and chief executive of the Casablanca Stock Exchange Karim Hajji noted the importance of the project, saying: "Regional integration is a high priority continental agenda. By organically linking seven exchanges in Africa which collectively have a market capitalization of over US$1.4 trillion, the AELP will stimulate intra-African flows and provide opportunities for investors and trading participants in over fourteen African countries. With the expected outcome of boosting liquidity in African capital markets, the AELP will unlock the powerful potential of African markets to access and redistribute domestic capital for economic development."
The discussions focused on regulatory, foreign exchange and operational considerations for implementing the proposed cross-border linkage, as well as the investment climate. The partners agreed that the linkage be implemented using a Sponsored Access trading model in the first phase, which is supported by the existing legal and regulatory frameworks in the participating jurisdictions.
In attendance were executives and senior management of the Bank, ASEA, the participating Exchanges such as Bourse Regionale Valeures Mobilieres, Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, The Nigerian Stock Exchange and the Stock Exchange of Mauritius.
Participating partners from the financial sector included the Banque Centrale des Etats de l'Afrique de l'Ouest, Le Conseil Régional de l'Epargne Publique et des Marchés Financiers, Autorité Marocaine du Marché des Capitaux, Securities and Exchanges Commission of Nigeria, and the Capital Markets Authority of Kenya.
Others are the Association Professionnelle des Sociétés de Bourse, Association of Stockbroking Houses of Nigeria, Kenya Association of Stockbrokers and Investment Bankers, Association Professionnelle des Banques Teneurs de Compte Conservateurs, Maroclear, Central Securities Clearing System, Nigeria, Central Depository and Settlement Corporation Ltd., Kenya and Afrinvest West Africa.
Technical contact: Akin Morounfolu Adigun, Senior Capital Markets Officer
