Market News

BY MacDonald Dzirutwe

LAGOS, Nov 10 (Reuters) – Nigeria is proposing a series of regional capital market reforms to make it easier for investors to trade bonds across West Africa and unlock long-term funding for infrastructure and growth, Finance Minister Taiwo Oyedele said on Tuesday.

• Oyedele told an S&P Global Ratings Africa Summit in Lagos that fragmented capital markets across West Africa are limiting access to long-term financing, with no single market deep enough to attract the scale of investment needed for infrastructure and economic growth.
• He proposed a regional “passport” regime that would allow issuers approved in one participating market to raise capital across others without seeking separate regulatory approvals.
• Nigeria is also advocating a unified investor identification system, enabling investors registered in one market to buy bonds and equities across the region without repeating onboarding requirements.
• Oyedele called for linking regional trading, settlement and payment infrastructure so securities transactions can be settled directly in local currencies, reducing reliance on the US dollar.
• The plan would encompass 10 countries: Nigeria and Ghana and eight francophone countries that share the CFA franc and a common central bank. They are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo.
• Oyedele said existing initiatives, including the West African Capital Markets Integration Council, the African Exchanges Linkage Project and the Pan-African Payment and Settlement System (PAPSS), provide a foundation for greater market integration.
• “The task now is to join these pieces together,” Oyedele said.
• Additional proposals include creating a regional local-currency bond index and a credit enhancement facility to support cross-border infrastructure financing.
• Nigeria aims to attain investment-grade credit ratings within three years and is targeting a capital market worth at least $1 trillion under a 10-year capital market plan, while making the country a more attractive destination for domestic and foreign investors, Oyedele said.