Kutlo Motseta
24th November 2024
Botswana hosted the 27th African Security Exchanges Association (ASEA) annual conference, which is the apex body for security exchange bodies in Africa.
The conference was held at the Royal Aria Center in Tlokweng, to promote operational harmony between exchanges, continental investment, legal compliance, ease of doing business within and from Africa; and promoting flow of capital throughout Africa.
Acting President, Ndaba Gaolathe delivered the opening keynote address, at a conference with theme – ‘Fostering transformation in capital markets through innovation.’
Gaolathe assured investors that the government fully supports the organization and is committed to growing Africa’s business potential.
“This platform] most importantly presents opportunity to invest in African markets and firms … The story of Africa is that opportunity. This opportunity can [also] be capitalized through the vast financial capital resources that remain undeployed due to illiquid and shallow markets that characterize our countries. But what’s fundamental to exploiting this opportunity is the need for markets to be underpinned by a regulatory framework that promotes transparency, that safeguards investor interest and ensures accountability within the capital markets ecosystem,” he said.
Pedro Guazo, CEO and Representative of the UN Secretary-General at the United Nations Global Pension Fund Investment Office, similarly spoke about the importance of regulatory compliance and the need for greater collaboration across the continent.
“The main problem with investments in Africa is the fragmentation of projects … for us to invest in Africa it has to be economic and cost effective. We need big scale investments to make a return on investments. … We are always looking to invest … we want to allocate [funding] but we need due diligence work in Africa [so African can be] seen as a safe place to invest,” said Guazo.
Chairperson of Botswana Stock Exchange, Neo Mooki, who is also Managing Director and Head of Investment Solutions at Generali A&WM in Italy, echoed similar sentiments.
“We can’t be lazy about government aspects that can’t make investors bring money into Africa. … we want to allocate to Africa. It’s just not just about size … Unless they get into line about sorting out ESG’s (Environment, Social Government regulatory compliance) we won’t allocate money … Onus on us to engage with rating agencies, fund managers to make sure we are getting those bye lists.”
Chief Executive Officer of the Botswana Stock Exchange(BSE), Kopang Bolokwe spoke with concern about the need for improved diligence when working with rating agencies to ensure that local financial service providers (FSP) are not underrated.
“The Onus is on us to work along with indices companies (FSP’s) … work on the information we give them,” he said.
Regarding collaboration, he said Botswana has benchmarked with countries in the region and offers, “15% discounts for initial multiple listings” and other discounts and incentives to make the local exchange attractive to stop the outflow of capital from the country and continent.
The relevance of technology, artificial intelligence and regulation was emphasized throughout the four-day conferences, as it plays a significant role in the assessment and monetization of markets.
“In financial services network technologies have been key to innovation catalyst a faster than ever before … Regulation is slow, unpredictable [we] need to shorten time it takes to formulate regulation and rules … Regulatory compliance may be too high creating entry barriers,” said Oduetse Motshidisi Chief Executive Officer(CEO) of Non-Bank Financial Institutions Authority (NBFIRA) .
Highlighting the importance of regulation for a safe trading environment, CEO of the Namibian Stock Exchange, Tiaan Bazuin said, “[In relation to] cryptocurrency, over the last of couple years we have been looking at the safe custody of [of these new] products … ownership of products, people … can get scammed but there are [security] improvements .. [we want to] provide a safe regulated environment to enable clients to transact [comfortably]“.
CEO Frank Mwiti of Nairobi’s Stock Exchange, spoke of Kenyan’s efforts to diversify products on its exchange and protecting against the growing trend of private equity.
”In terms of how you define alternative assets … we focused on sustainability agenda, real estate portfolio, we see private equities developing in Kenya, we are looking at investing in foreign currencies … [we see] a shift from public to private equity globally, trend is delisting and moving to private markets.”
President of ASEA, Pierre Celestin Rwabukumba, spoke of the need to promote continental collaboration and independence.
“We are all facing the same issue on our continent in our markets, issues of liquidity not enough products to be traded and we are not harmonised … Let’s remove those borders and those hurdles and work together in a unified manner I think together we can make it as African markets to develop our domestic markets to rely on our people, on our markets, our own money to support our companies, regionally and continentally … we can make our continent proud again without relying on outside help, when we are capable,” he said.
Rwabukuma handed a ASEA award of service to his predecessor Thapelo Tsheole. Tsheole is the former CEO of BSE, a post he vacated to head the Rwandan Stock Exchange in Kigali, Rwanda.
