There is no doubt saying that in 2001, when the heads of state in the West African Monetary Zone (WAMZ), comprising West African nations of the Gambia, Ghana, Guinea, Nigeria and Sierra Leone established the West African Monetary Institute (WAMI), they had objectives.
In line with their objectives, last year (precisely on January 18, 2013) the West African Capital Markets Integration Council (WACMIC) was inaugurated as the governing body for the integration of West African capital markets.
Objective and role of WACMIC
The over-arching objective of the Council is to establish a harmonised 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.
Last week in Lagos and Abuja, respectively, WACMIC engaged all market stakeholders in interactive workshops to learn more about the framework for achieving sub-regional integration, the requirements for participation, and the timeline for integration.
WACMIC, which comprises the chief executives of West African region’s securities and commissions and securities exchanges, is tasked with designing the policy framework and managing the implementation of the process that will facilitate the creation of an integrated capital market in West Africa.
Specifically, the Council is to: supervise the capital market integration programmes; set up standards and validate all works done by the technical committees; coordinate relevant stakeholders, such as Economic Community Of West African States (ECOWAS), West African Monetary Institute (WAMI), and West African Economic and Monetary Union (WAEMU); monitor and assess the state of preparedness of the member states in the integration process; source funds and other resources for the implementation of capital market integration, and monitor standards and compliance post-integration.
Current Council members
The current Council members are: Oscar Onyema, CEO, Nigerian Stock Exchange (chairman); Edoh Kossi Amenounve, CEO, Bourse Régionale des Valeurs Mobilières (vice chairman); Arunma Oteh, director-general, Securities and Exchange Commission (member); Mamadou Traore, CREPMF, Côte d’Ivoire, (member); Adu Anane Antwi, Securities and Exchange Commission, Ghana (member); Kofi S. Yamoah, Ghana Stock Exchange (member); Gibrilla Sesay, Sierra Leone Stock Exchange (member), and Tapsiru Dainkeh, Central Bank, Sierra Leone (member).
Deepening pool of capital in markets across West Africa
The integration of West African capital markets will enable companies listed in stock exchanges of every West African country access deeper pool of capital in markets across West Africa. Likewise, investor member countries can through a licensed issuing house or broker dealer raise money or trade in stocks exchanges across West African countries.
As of 2013, 190 listed companies on the NSE were valued at $82 billion; 34 companies at Ghana Stock Exchange (GSE) were valued at $26 billion, while 72 companies at BRVM (Cote D’Ivoire), which is a market for eight Francophone West African countries, were valued at $12 billion, and Sierra Leone Stock Exchange has one company. Collectively, about 297 operating companies listed on stock exchanges across West African countries were valued at $120 billion.
What stakeholders say
Oscar Onyema, CEO, NSE, who is the chairman of WACMIC, has set April 2014 to recommence the process of the market integration.
He noted that the process for integrating the region’s capital market started in 2010, with the signing of a Memorandum of Understanding (MoU) by the stock exchanges and the regulatory authorities in the region to deepen cooperation, promote mutual assistance, and facilitate the exchange of information and consultation among West African countries.
WACMIC, which was inaugurated as the governing body for the integration of West African capital markets, comprises of chief executives of the West African region’s Securities and Exchange Commissions, and securities exchanges.
“By end of 2015, there would be a fully integrated West African Securities market. Investors in countries without exchanges can assess West African Securities Market through qualified licensed brokers in countries that have exchanges. Broker dealers that are not qualified will use sponsored assess to link the market,” Onyema said.
According to him, in the first stage of this market integration process, various stock exchanges are funding themselves, but “the second stage which requires technology integration means WACMIC will source for fund across the region. There will be integrated trading platform and common passports.”
Suleyman Ndanusa, chairman, board of SEC, said “as the world becomes global with technology, market integration encourages more companies to list.
“As investors are provided the opportunities to raise capital across the continent, it also offers opportunities to have sub-national shareholders.” He added that “the reality is that the region stands better by integrating its markets than remaining in asylum.”
Speaking at the sensitisation workshop in Abuja, Ayo Adeseun, chairman, Senate Committee on Capital Market, said the Senate supported integration of regional capital markets. Adeseun, who was represented by Habiba Mohammed, urged the market integration council to “fast-track the process.”
Insight into some resolutions by Depository, Trading, Clearing and Settlement (DTCS) sub-committee
David Tetteh of Ghana Stock Exchange, who is also a member of the Depository, Trading, Clearing and Settlement (DTCS) sub-committee, said they had resolved to have across the region, harmonised trading hours (9am to 3pm), while price movement in all the markets will be plus or minus 10 percent. He said on securities clearing and settlement time, the regional committed adopted T+3 for equities and T+2 for fixed income.
Tetteh said: “On different issues, some jurisdictions are ahead or behind, but with the integration, we will all adjust. The committee has set an ambitious target of full dematerialisation by December 31, 2015.”
Creating awareness for market integration
In pursuance of this laudable objective of market integration, technical committee meetings have been held in Cote D’Ivoire, Ghana and Nigeria to develop the required technical framework for the trading and settlement infrastructure as well as the legal framework necessary for seamless integration.
Implication of market integration
This implies that local companies seeking to raise capital in stock exchanged across West African countries will now have access to deeper pool of capital when West African Securities Market (WASM) goes live by 2015.
The development will also enable companies and investor in Nigeria, for instance, to through a licensed issuing house or broker dealer raise money of trade in stocks listed on say Ghana Stock Exchange, Cote D’Ivoire (Bourse Regionale des Valeurs Mobilieres) as well as other stock exchanges across West African countries, like Sierra Leone and vice-versa.
By: Iheanyi Nwachukwu