The African Stock Exchange Association (ASEA) is preparing to launch the second phase of the African Exchanges Linkage Project (AELP), following the successful implementation of phase one.
The project aims to provide investors with a wide range of investment opportunities across African capital markets.
During a recent AELP webinar titled “Exchange Linkage Project – Facilitating trades across borders,” Mr. Thapelo Tsheole, President of ASEA and CEO of Botswana Stock Exchange, shared the association’s plans for the next phase.
The webinar, hosted by the Nigerian Exchange Limited (NGX) and supported by various market stakeholders, shed light on the benefits and objectives of the AELP, along with other cross-border transaction requirements such as Pan African Payment and Settlement (PAPSS).
Mr. Tsheole commended NGX for its promotion of the AELP initiative, emphasizing the importance of such endeavors in light of the challenges faced by African economies.
He highlighted Africa’s resilience and underscored the need for initiatives like the AELP, which foster deeper integration and connectivity among the continent’s capital markets.
Mr. Tsheole encouraged Nigerian brokers to reach out to their counterparts in other countries, promoting expanded cross-border trading across Africa.
Phase one of the AELP was successfully launched in December 2022, connecting seven exchanges across the continent.
Phase two, scheduled to roll out in Q3 2023, will involve approximately 15 exchanges, expanding the investment prospects available to investors in Africa.
The project has already secured funding approval from the African Development Bank (AfDB), ensuring its continuation and growth.
Lina Tonui, the Project Manager of AELP, further affirmed the project’s potential. With the support of the AfDB, phase one received $980,000 from KOAFEC for its implementation.
Tonui highlighted that the AELP will increase the visibility of linked exchanges with a combined market capitalization of $1.5 billion.
It will also provide access to diverse investment products, support innovation, and facilitate Pan-African capital raising through initial public offerings (IPOs).
Ositadimma Ugwu, Head of Technology and Operations at PAPSS, emphasized the benefits for participating exchanges.
Local currency payments will reduce pressure on a country’s reserves, while eliminating third-party dependencies will greatly ease intra-African trade.
During his opening remarks, Temi Popoola, CEO of NGX, acknowledged the challenges faced by African stock markets despite their growth potential.
He expressed optimism that the AELP would encourage increased investment participation and further enhance financial inclusion in the country.
Popoola also reaffirmed NGX’s commitment to collaborating with all market stakeholders to foster collective growth and the development of the capital market in Africa.
Lamido Yuguda, the Director-General of the Securities and Exchange Commission (SEC), shared a goodwill message, pledging the commission’s commitment to providing regulatory support that enhances market transparency.
He expressed the SEC’s support for initiatives driving the development of the capital market.
Mr. Akeem Shadare, Managing Director of Chapel Hill Denham Securities Limited, concluded the event with a message highlighting the significant benefits the AELP can bring to participating African countries and their capital markets.
Shadare emphasized that the project has the potential to promote economic growth and development across the continent.
