Efforts are being intensified to ensure that capital markets within the West African sub-region get integrated by the first quarter of 2016, Suleyman Ndanusa, board chairman of the Securities and Exchange Commission (SEC), said on Thursday. Integrating the West African capital markets will not only empower the sub-region to be a formidable force to other emerging markets, but would also tackle the challenge of depth and liquidity which would help create a bigger market for both local and foreign investors. Three phases are needed before the integration process can happen- including direct access market phase; the qualified West African stockbroker phase and the West African capital market phase which is the ultimate.
Speaking shortly after the opening session of the 5th meeting of the West African Capital Markets Integration Council (WACMIC) in Abuja, Ndanusa expressed satisfaction with the significant progress so far made in the integration process, especially in two out of these three phases for integration.
“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 1 in April 2014; we are working towards stage two and three. So, obviously, latest by first quarter of 2016 we should have attained the three stages for integrating the capital market in West Africa,” Ndanusa noted.He charged the council to push harder for the harmonisation of market processes, regime instruments, while ensuring the environment is as adaptable as possible and that compliance cost minimal.
“Let us push harder for the harmonisation of market processes, regimes and instruments, while ensuring the environment is as adaptable as possible and that compliance costs are minimal. “We should also properly situate financial literacy and financial inclusion within the architecture of this integration project. The people of this region must, after all, be carried along for the ultimate actualisation of this lofty dream”, Ndanusa said.
Ndanusa also disclosed that the single currency project for the sub-region is still being worked out by the West African Monetary Union.
According to him, a technical committee working on this issue is made up of the central banks of participating countries for this market also working with the ministries of finances.
Oscar Onyeama, chief executive officer of the Nigerian Stock Exchange and outgoing chairman WACMIC, called on the technical committee members of the council to ensure that the implementation continues and that markets are positioned to play a critical role in development across the sub-region. Onyeama noted that with a population of over 300 million people and with a combined Gross Domestic Product of $600 billion and a land mass bigger than that of the European Union, the region would witness improvement in its GDP. He, however, listed some of the impediments of integration to include company law issues, free movement of foreign exchange across the region and free movement of people.
There are also technical challenges such as harmonisation of rules, Onyema said, noting that they 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.
The two days meeting which was attended by delegates from all the countries within the West African 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 of 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.
