The Nairobi bourse will pilot the African Exchanges Linkage Project (AELP) along the Casablanca Stock Exchange (CSE), the Johannesburg Stock Exchange (JSE) and the Nigerian Stock Exchange (NiSE) under the plan to deepen African financial markets.
Kenya’s capital market received a boost after the African Development Bank (AfDB) and the African Securities Exchanges Association (ASEA) signed a five-year deal to make the Nairobi bourse a regional hub.
Nairobi Securities Exchange (NSE) will pilot the African Exchanges Linkage Project (AELP) along the Casablanca Stock Exchange (CSE), the Johannesburg Stock Exchange (JSE) and the Nigerian Stock Exchange (NiSE) under the plan to deepen African financial markets.
The African centred bank and securities exchange association say deepening and connecting African financial markets will help mobilise resources to fund the continent’s private sector.
“This programme marks a new dawn not only in the African Capital Market but also in the entire financial services industry. This partnership will bring forth exciting projects and instruments aimed at strengthening the African Capital Market,” NSE chief executive Geoffrey Odundo said.
The programme is expected to address the lack of adequate liquidity in African capital markets by creating linkages across markets.
It is envisaged that the linkage will allow cross border visibility and open up markets for investors to trade in any of the linked markets.
“Strengthening and deepening of Africa’s financial markets is a powerful tool to mobilise domestic and international savings at an efficient cost and channel them towards funding Africa’s private sector,” Dr Akinwumi Adesina, AfDB president said.
Mr Adesina said the programme is critical to accelerate the pace to achieve the bank’s Ten Year Strategy 2013-2022 for green and inclusive growth in Africa.
The AfDB boss has been a proponent for finding ways to raise money in the continent as opposed to taping dollar debt from international financial markets.
During the recent African CEO Forum in Abidjan, Ivory Coast, Mr Adesina urged African countries to find ways of financing development internally to guard against shocks of dollar-denominated debt.
Mr Adesina said Africans should instead increase tax bases and tap into internal markets to finance budget deficits.
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