By the end of 2016, West Africa should have a new virtual stock exchange integrating no fewer than 12 countries into one joined-up market place with one single order book for the whole region. The participants in this West African Securities Market, or WASM, are Nigeria, Ghana, Sierra Leone, Cape Verde and the eight francophone West African countries forming BRVM Stock Exchange: Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
The local stock exchanges will remain in place in parallel with the WASM. The resulting stock exchange will be second only to JSE in Africa, cover a region inhabited by 290 million people and hold 7% of the current African market cap. “Achieving integration will speed up the development of best practices in corporate governance, accounting standards etc.
This will facilitate growth in the markets, which will empower the member states to attract investment flows with a larger and more diverse offer,” explained Paul-Jerome Koffi Kingbo from the West African Capital Markets Integration Council (WACMIC), which oversees the development of the WASM. The WACMIC is chaired by the CEO of BRVM, Edoh Kossi Amenounve. In 2013, WACMIC was inaugurated as the governing body for the integration of West African capital markets.
The over-arching objective of the Council is to establish a harmonized regulatory environment for the issuance and trading of financial securities across the region, as well as to develop a common platform for cross-border listing and trading of such securities in the sub-region.
Once established, the WASM should help ease the movement of capital within the region and create flexibility for issuers looking to raise capital and investors, according to Kingbo. The development of active debt markets would, among other things, help the development of much needed major infrastructure projects along, as the countries within the WASM framework would have easier access to finance. It is hoped that investing off shore will become a lot easier for the participating countries and that the emergence of the WASM will hopefully entice not just private funds and foreign investors, but also the local pension funds to invest across borders, giving a much needed boost to the liquidity in the region.
At the beginning of the WASM, the single order book would collate all the orders with their respective local currencies, but the final goal is to use the ECO currency. The program is supported by the ECOWAS commission and is part of the regional integration program in collaboration with the West African Monetary Institute.
Author: Anne-Louise Stranne Petersen
Written by African Global Funds