AfDB signs MOU with ASEA to develop Africa’s capital markets

AfDB signs MOU with ASEA to develop Africa’s capital markets

The African Development Bank (AfDB) and the African Securities Exchanges Association (ASEA) have signed a five-year Memorandum of Understanding (MoU) to amplify the impact of their strategically aligned joint efforts to promote resources mobilization to fund Africa’s economic growth.

The MoU would provide a collaborative framework for harmonizing and coordinating the efforts of AfDB, the premier international development financial institution for Africa, and ASEA, the premier body of African stock exchanges, towards deepening and connecting African financial markets.

The partnership will facilitate various projects of mutual interest to both the Association and the Bank, targeting areas such as financial markets infrastructure development, introduction of new products in the market, improving market liquidity and market participation, information sharing and capacity building amongst other programs.

The President of AfDB, Akinwumi Adesina argued that the strengthening and deepening of Africa’s financial markets, as a strong tool to mobilize domestic and international savings at an efficient cost, and channeling them towards funding Africa’s private sector, was critical to accelerating the pace to achieve the bank’s 10-year strategy from 2013-2022 all inclusive growth in Africa.
“It is therefore integral to the Bank’s High 5s Priority Agenda to ‘Light up and Power Africa’ to ‘Feed Africa’, to ‘Integrate Africa’, to ‘Industrialize Africa’ and to ‘Improve the Quality of Life of Africans’, all of which embody core elements of the 2030 Agenda for Sustainable Development Goals (SDGs).”

According to the President, African Exchanges Linkage Project (AELP), Oscar Onyema explained that the maiden project to be undertaken under the cooperation initiative would be the AELP.

“Collaboration will extend to other joint projects or programs over time. Co-initiated by ASEA and the Bank, the AELP is aimed at addressing the lack of liquidity in African capital markets by creating linkages across markets. It is envisaged that the linkage would allow cross border visibility and open-up markets for investors to trade in any of the linked markets.”

He noted that the AELP would primarily commence with the four pilot Exchanges selected by ASEA as regional hubs during the incubation phase of the project, namely the Casablanca Stock Exchange (CSE), the Johannesburg Stock Exchange (JSE), the Nairobi Securities Exchange (NbSE) and the Nigerian Stock Exchange (NiSE), adding that it would eventually be extended to other ASEA Member Exchanges.

With regards to the AELP, according to Onyema, these linkages would support innovation, stimulating the creation of suitable products in relations to instruments listed on the various linked markets creating more investment opportunities for the investor community.

He stressed that the linkages would also afford issuers access to deeper pools of capital and a wider community of investors and analysts, adding that AfDB and ASEA are devoted to ensuring that the continent achieve its full economic potential through the AELP with a continuous robust relationship.

Source:© Copyright Guardian Online