Roundup: Vibrant capital markets will drive Africa into middle income continent: experts

Experts in capital markets are advocating the acceleration of the bourses markets across Africa in order to drive economic growth on the continent.

Speaking at the opening of Africa securities exchanges conference in the Rwandan capital Kigali on Monday, experts emphasized that capital markets are becoming more important to African economies because they help raise funds for long term investment which will drive Africa into middle income status.

Rwanda hosts the 20th African Securities Exchanges Association (ASEA) annual conference from November 27 to 29 dubbed: "The Road to 2030: Making the African Capital Markets Relevant to the Real Economy."

The three-day meeting has brought together more than 300 global and regional experts and stakeholders in capital markets, regulators, law firms and issuers, domestic, regional and international investors, rating agencies, portfolio and investment managers and government representatives, among others, to discuss the future of capital markets development in Africa.

"Vibrant and strong capital markets will play a key role towards Africa's economic growth which is a catalyst to drive the continent into middle income status. Because they lay a robust foundation for accelerating and sustaining economic development for any economy across the continent," said Oscar N. Onyema, Chief Executive of Nigeria Stock Exchange.

He noted that through concerted effort between the private sector and the government on nurturing growing capital markets, regulatory infrastructure, and collaboration, Africa stands a chance to be one of the vibrant financial hubs globally.

The conference is expected to provide a platform to network and exchange information with industry leaders from across the continent and beyond.

Experts pointed out capital markets will be key channel for the massive investment to drive Africa's economic growth over the next 20-30 years, including finance for business, infrastructure, social and development gains.

African financial markets are dominated by banks, but capital markets are slowly developing and are beginning to play an increasingly vital role in strengthening African economies, according to the International Monetary Fund.

Claver Gatete, Rwanda minister of finance and economic planning, noted that African economies should accelerate the development of capital markets to stimulate innovations of financial services instruments which will propel the continent's sustained growth.

"Developed and organized capital markets will enable Africa to find sustainable financing solutions because they have the potential to consolidate and sustain economic growth," Gatete said.

However, Gatete pointed out that small size of African economies and the fragmentation of stock exchanges have delayed development of capital markets on the continent.

Speaking at the forum, Anastase Murekezi, Rwanda Prime Minister noted that, there's huge importance of capital markets in developing African countries which is a foundation for inclusive growth.

According to African Development Bank (AfDB), bond markets in Africa remain largely underdeveloped, with corporate bond markets non-existent or in their infancy.

However, as Africa's capital markets continue to mature, governments across the continent need to maintain economic stability and transparent governance, in order to boost investor's confidence.

ASEA, formed in 1993, aims at developing member exchanges through provision of a platform over which exchange of information is carried out.

The 19th African Securities Exchanges Association annual summit was held in Johannesburg, South Africa last year. Endit