10 June 2015, Lagos – The integration of capital markets in West Africa has become crucial for raising funds to finance economic activities in the region, the Director-General, Securities and Exchange Commission, Ghana, Dr. Adu Antwi, has said.
According to Antwi, the integration of West Africa capital markets will boost funding economic activities in the region.
Antwi stated this on Tuesday at the 11th Annual PEARL Awards Public Lecture for capital market development in Lagos. Speaking on ‘Integrating West African capital markets: Issues, challenges and prospects,’ Antwi said well-developed capital markets have played important roles in the economic development of many countries.
However, he said most African stock exchanges were are at their early stages of development and faced several constraints.
According to him, evidence to support the view that West African stock exchanges remain underdeveloped could be found by considering the few listed companies, low market capitalisation, low liquidity, limited range of investment products, and low level of capital market knowledge among the populace, among others.
“Most capital markets in emerging countries like those in West Africa have been described as narrow and illiquid, and discourage investors from investing in these markets,” he said.
He noted that the development of markets in the region would create more efficient capital markets that promote economic development.
“In integrated capital markets, capital moves freely across borders and investors and users of capital have the same opportunities within a region, whereas in segmented markets, the capital investment of firms in one country is limited to the savings provided by the country’s consumers,” he said.
Antwi said the current initiative to integrate the West African capital markets, which started in 2012, led to the establishment of the West African Capital Markets Integration Council, made up of the DGs of the sub-regions securities commissions and the chief executive officers of the four stock exchanges with observers from The Gambia, Guinea,
According to him, the integration would be successful this time around as its importance and benefits were huge. He also expressed the belief that ECOWAS and all the sub-regional organisations viewed the integration of West African capital markets as a very important tool for the integration of West African economies.