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Strategies of Financial Market Integration: The Experience of SADC and East Africa

1 August 2012. MSK (c). OVERVIEW. I.INTRODUCTION-African Scenario: Capital MarketsII.CAPITAL MARKETS AND ECONOMIC DEVELOPMENTIII.ACMF AND UNECA CAPITAL MARKET PROJECT IV.THE SADC EXPERIENCE-Stock Exchanges-CISNAV.THE EAST AFRICAN EXPERIENCE-EASRAVI.

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Strategies of Financial Market Integration: The Experience of SADC and East Africa

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    1. “ Strategies of Financial Market Integration: The Experience of SADC and East Africa” Mumba S Kapumpa Chair African Capital Markets Forum Former Secretary and Chief Executive Securities and Exchange Commission, Zambia

    2. 2 August 2012 MSK (c) OVERVIEW I. INTRODUCTION - African Scenario: Capital Markets II. CAPITAL MARKETS AND ECONOMIC DEVELOPMENT III. ACMF AND UNECA CAPITAL MARKET PROJECT IV. THE SADC EXPERIENCE - Stock Exchanges - CISNA V. THE EAST AFRICAN EXPERIENCE - EASRA VI. COMMON NEEDS AND STRATEGIES VII . CONCLUSION - Future Prospects 2

    3. 2 August 2012 MSK (c) I. INTRODUCTION African Scenario Constraints to Capital Market Development: - lack of skilled manpower - lack of training institutions - lack of legal/regulatory framework - inadequate market information - lack of sub-regional coordination 3

    4. 2 August 2012 MSK (c) II. CAPITAL MARKET AND ECONOMIC DEVELOPMENT mobilization and allocation of long term finance reduction dependence on banking diversified financial system (stock, bond, derivative markets) creation of liquidity in markets 4

    5. 2 August 2012 MSK (c) III. ACMF AND UNECA CAPITAL MARKET PROJECT Needs Assessment Missions Phase I - 1999 SADC, West Africa - 2000 East Africa, North Africa - review stage of capital market development - identify needs: national/regional - Phase II and III implementation of Missions’ Recommendations 5

    6. 2 August 2012 MSK (c) III. AFRICAN CAPITAL MARKETS FORUM (ACMF) 1992 - Abuja International Conference Capital Market Promotion - declining/low growth rate - low savings and investment - high debt burden - few African Capital Markets - recommends set of ACMF: to discuss, proffer solutions 6

    7. 2 August 2012 MSK (c) III. 1993 - Nairobi African Capital Market Conference - steering Committee under UNECA - (birth of ASEA) 1994 - Libreville African Finance Ministers - endorses ACMF Constitution 1996 - Accra International Conference Revising Private Invest. Africa - ACMF launch by Robert Mugabe 7

    8. 2 August 2012 MSK (c) III ACMF CONSTITUTION promotion African Capital Markets accelerate existing markets co-operation African Capital Market institutions forum exchange ideas among African Capital Markets 8

    9. 2 August 2012 MSK (c) IV. SADC EXPERIENCE 14 members, 184 million SADC Treaty - co-ordinate, harmonise, rationalise economic policies, strategies: sustainable development - provision to develop Protocols Finance and Investment Protocol building block for regional integration 9

    10. 2 August 2012 MSK (c) IV. July 1998 - SADC Finance Ministers Meeting: - 4 years protocol development process - Principles Framework development - MOU’s to develop Protocols - several areas for Protocol including capital market development and insurance - regional integration gradual, sequential, incremental varying levels of economic development 10

    11. 2 August 2012 MSK (c) IV. SADC EXPERIENCE SADC Finance and Investment Protocol: - macro-economic co-operation - investment provisions - monetary and financial - development finance - capital market development, insurance - provisions ensuring implementation 11

    12. 2 August 2012 MSK (c) IV. SADC EXPERIENCE SADC Sectoral Strategic Objectives - develop clear growth and development strategy - integration of SADC markets - liberalisation, integration financial markets - integrated regulatory framework for insurance, securities and non-bank 12

    13. 2 August 2012 MSK (c) IV (a) Stock Exchanges 2006: integrated real time network increase liquidity of trading equities, bonds, derivatives improve operational capacity of SADC exchange - Exchanges Governors MOF/I 13

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