The Swedish International Development Cooperation Agency (Sida), IFC and the World Bank are jointly working on a project to develop well-functioning securities markets in Africa. Under the Efficient Securities Markets Institutional Development (ESMID) program, the three institutions are providing support to emerging African capital markets.
Sida has provided US$5.5 million to support program activities, which initially targets five countries, namely Rwanda, Kenya, Tanzania, Uganda, and Nigeria. Operations are carried out as a regional program in East Africa and as a country program in Nigeria.
In these countries, ESMID is working with central banks, securities regulators, stock exchanges and other stakeholders to: simplify regulations and procedures for issuing, investing in, and trading bonds; establish and strengthen market infrastructure; build capacity of market participants; facilitate the regionalization of securities markets; and support demonstration and replicable transactions. In Nigeria, ESMID is working with several stakeholders including regulators and market operators to develop an enabling environment for fixed income capital markets and promote capacity building for market participants.
ESMID is currently expanding into the Latin America and Caribbean region (Peru and Colombia), and is looking to expand into new countries in Africa, and also to support operations in South and East Asia and emerging Europe.
Legal and Regulatory Assistance
To improve the legal and regulatory environment for issuing and trading bonds. In particular, improve issuance and investment requirements; address the lengthy and cumbersome approval process for corporate bonds; reduce the high direct & indirect costs of issuing bonds; develop regulations for an appropriate market structure; and develop a framework for securitization.
Secondary Markets and Market Infrastructure
To deepen secondary markets through practical recommendations for improving bond market infrastructure; to promote availability and transparency of trading information, and to improve efficiency of clearing and settlement.
Capacity Building and Training
To help strengthen the knowledge, skills and capabilities of issuers, investors, and intermediaries involved in securities market operations through training and certification programs, as well as working with regulators to provide a framework for licensing of market participants. The objective is to build professionalism, promote market integrity, boost demand and supply of products through increase in knowledge and capacity, and to support the regionalization initiative.
Regionalization of Capital Markets
To create a deeper more efficient capital market across the East African Community (EAC) for both equity and bond markets, and facilitate cross-border issuance and investments in securities.
To provide financial and advisory support for bond issuance of innovative and replicable transactions, and to pave the way for other bond issues to come to market.