JOINT INTITIATIVE

NSE partners with AfDB, African exchanges to boost investment

The joint initiative will facilitate cross-border trading and settlement of securities across participating exchanges in Africa

In Summary

•The AELP, which started in 2016 with only four exchanges, has since expanded to seven participating exchanges

•The partnership seeks to unlock Pan-African investment flows, promote the diversification needs of investors and address the lack of depth and liquidity in Africa’s financial markets

A file photo of a man walking out of the Nairobi Stock Exchange NSE in Kenya's capital Nairobi
A file photo of a man walking out of the Nairobi Stock Exchange NSE in Kenya's capital Nairobi

Kenya is among African countries partnering  with African Development Bank and the African Securities Exchanges Association (ASEA) to bolster investments.

Through the African Exchange Linkage Project (AELP), the initiative will facilitate cross-border trading and settlement of securities across participating.

AfDB capital markets and development manager Emmanuel Diarra said the partnership complements the bank’s interventions toward the development of deep and resilient capital markets in Africa.

 

“The Bank will continue to enhance its work with regulatory institutions, institutional investors, stock exchanges and other capital market stakeholders to strengthen regulatory frameworks, broaden market participation and product offerings, as well as improve the dissemination of capital markets data for transparent pricing mechanisms,” Diarra said. 

The AELP, which started in 2016 with only four exchanges, has since expanded to seven participating exchanges.

They are the Johannesburg Stock Exchange, the Egyptian Exchange, Stock Exchange of Mauritius, the Casablanca Stock Exchange, Nairobi Securities Exchange, the Nigerian Stock Exchange and Bourse Régionale des Valeurs Mobilières that serves Francophone West Africa.

The seven stock exchanges participating in the first phase of the AELP represent about 85 per cent of Africa’s securities market capitalisation.

It also seeks to unlock Pan-African investment flows, promote the diversification needs of investors and address the lack of depth and liquidity in Africa’s financial markets.

The long-term goal is for all 27 African stock exchanges to join the project and increase Africa’s competitive advantage compared to other emerging markets.

Head of public policy at the JSE Anne Clayton said there is great interest within Africa for investment adding that the AELP would provide an opportunity to align exchanges within the continent.

 

“Therefore collaborations with key stakeholders will continue to be at the centre of securing a growth path for Africa,” she said.