The African Securities Exchanges Association (ASEA) and the African Development Bank Group (AfDB) have signed an agreement for a $600,000 grant to expand the number of linked African exchanges from seven to 15 under the second phase of the African Exchanges Linkage Project (AELP).
According to the deal signed on June 28, the funds will come from the Korea African Economic Cooperation Fund (KOAFEC) Trust Fund, managed by the AfDB.
The AELP is a flagship project of ASEA and the Bank Group to link African capital markets, thereby promoting cross-border securities trading, increasing liquidity and diversifying investment opportunities for investors.
According to a statement on Wednesday, AELP’s second phase will provide investors access to over 2,000 securities listed on up to 15 capital markets through a cross-border securities trading platform tailored to the needs of regulators, central depositories, policymakers, and stockbrokers.
Participating stock exchanges include the Botswana Stock Exchange, where the grant signing took place; the Ghana Stock Exchange and six other stock exchanges.
The grant is also dedicated to supporting capacity building of institutional investors and capital market operators.
Thapelo Tsheole, President of ASEA and CEO of the Botswana Stock Exchange, signed on behalf of the association.
He said: “We express our gratitude to the African Development Bank for their invaluable support and dedication to the development of African Capital Markets. With the generous grant funding, we are poised to expand technical connectivity and linkage among African stock exchanges, creating a broader pan-African network.
“Together, we are working towards a fully integrated Africa for the benefit of investors, businesses and governments across the continent.”
Solomon Quaynor, the Bank Group’s Vice President for Private Sector, Infrastructure and Industrialization, signed on its behalf.
He said: “The Bank is pleased to extend its partnership with ASEA through the follow-on support for Phase 2 of the African Exchanges Linkage Project.”
According to him, the AELP is facilitating regional integration through African stock exchanges linkage amounting to up to $1.3 trillion in combined market capitalization.
He noted that the collaboration between the Bank and ASEA through the AELP aligns with “our objective of leveraging institutional investor groups and capital markets financing into infrastructure and the real sector in regional member countries.”
The objectives of the AELP align with the African Union’s Agenda 2063 and the African Continental Free Trade Agreement’s (AfCFTA) goal of establishing a liberalized market to ease the movement of capital and investments and deepen the continent’s economic integration.
The African Development Bank supported the first phase of the AELP, which was also funded with a KOAFEC grant.
Phase one supported the setup of an infrastructure interconnectivity platform involving seven stock exchanges and 31 stockbrokers. It also offered training for over 1,000 capital market operators.
ASEA Eyeing AELP Phase II Roll-out by Q3 2023
