HIGHLIGHTS OF DISCUSSIONS AT THE WORKSHOP

  1. Capital markets are essential for Africa’s economic development; they ensure efficient allocation of resources to areas of most need.

  2. At present, our markets are diverse; many still operate by the old traditional methods. They work in isolation and have to deal with multiple regulators.

  3. They are constrained by low liquidity, a small domestic investor base, manual trading and settlement infrastructure, low efficiency, lack of availability of real-time market information and poor corporate governance practices.

  4. But for a successful capital market, we need:

    1. A stable political environment;

    2. Appropriate and effective legal and regulatory frameworks;

    3. Sound macro-economic environment;

    4. A sound tax policy;

    5. A smooth and secure settlement system; and

    6. An active money market.

  5. Because of the constraints facing most of our capital markets, we should aim for regional integration of African capital markets.

  6. But regionalisation does not mean one physical stock exchange in a region.

  7. Regionalisation can take various forms, such as sharing a regional trading platform, cross listing, and so on.

  8. But we still need to develop the individual markets to make integration easier.

  9. We should first focus on our domestic markets; we should look inward and also run the exchanges on business principles.

  10. At present, our financial sectors are quite shallow but we should see this as an opportunity to be exploited.

  11. There is plenty of money in some economies. We should try and bring this into the capital markets. We should also try to tap into the wealth of the Diaspora.

  12. The foreign investors will come when they see that domestic investors are investing and especially that the Diaspora has confidence in our domestic markets.

  13. Education is an absolute must – we must educate the public generally about capital markets and se must also educate the stakeholders.

  14. Policy-makers need to be specially targeted for education on the development of the capital markets.

  15. Governments clearly have a role to play in the development of the market:

    1. Protecting of investors;

    2. Enhancing transparency in the budget and borrowing process; and

    3. Ensuring fair, efficient and transparent markets.

  16. Rating agencies also have a role to play; a bad rating is better than no rating at all.