Accra, Ghana – June 27, 2023 – The Ghana Stock Exchange (GSE) hosted a stakeholder meeting on Thursday, June 22, 2023, at the Accra City Hotel to raise awareness about the African Exchanges Linkage Project (AELP). The session was attended by Stockbrokers, Fund Managers, Central Securities Depository, and the Securities and Exchange Commission (SEC) and other market players.
The AELP presents significant opportunities for investors within Ghana and across the continent. The GSE and its investors through the AELP will have access to enhanced liquidity, a wider investor base, and access to diverse asset classes across the participating exchanges. Following the successful launch of Phase 1 in December 2022 connecting 7 exchanges and over 30 brokers, preparations are underway for Phase 2, which is scheduled for rollout in the coming months.
While giving her opening remarks, Ms. Abena Amoah, the Managing Director of the GSE, said “We are excited about the GSE’s participation in the AELP and look forward to reaping the benefits it presents to our market and investors. The AELP complements our other regional integrations and provides a wider range of investment opportunities. We understand the importance of this collaboration among stock exchanges and urge our members to seize this opportunity presented to us through the AELP for our own market advancement. I also encourage the support of the Central Securities Depository (CSD) and Securities and Exchange Commission (SEC) as we embark on this journey of integration throughout the continent”.
The Ghana Stock Exchange, alongside Botswana Stock Exchange, will be the first exchanges to integrate in Phase 2, a significant milestone. ASEA aims to expand the network of participating exchanges to potentially encompass 15, with the long-term goal of granting investors access to all 26 ASEA member exchanges across Africa. These exchanges collectively have a market capitalization of approximately USD 1.6 trillion, providing investors with vast opportunities for maximizing returns and capitalizing on the continent’s investment potential. A Ghanaian investor will be able to diversify their portfolio through trading in other countries in the continent. Ghana Stok Exchange and its broker members in return will see inflows of investments from other African countries into its market.
“Over the past year, Africa’s economies have encountered substantial difficulties, which have been amplified by global circumstances,” stated Mr. Thapelo Tsheole, President of ASEA. “In this context, it is vital for African Securities Exchanges to champion alternative methods of raising capital through the Capital Markets. This is particularly crucial considering the fiscal and debt vulnerabilities experienced by African governments. In the long run, the AELP will facilitate cross-border capital raising through Initial Public Offerings (IPOs), allowing governments to secure funding for economic development within the continent instead of resorting to costly and punitive external financing.”
Despite the current economic climate, ASEA remains optimistic about the future of capital markets in Africa. Recognizing the inefficiencies in fund transfers and the reliance on foreign currencies for payments, ASEA took a step towards addressing these challenges by signing a memorandum of understanding (MoU) with the Pan- African Payments and Settlements System (PAPSS) in April 2023. This partnership aims to streamline payment and settlement processes across the continent, thereby enhancing cross-border trading efficiency.
The AELP, alongside PAPSS, exemplifies the potential for cross-border trading within the framework of the African Continental Free Trade Area (AfCFTA). Under this framework, ASEA will work towards enhancing continental trade and aims to emphasize the role of capital markets in infrastructure development and overall economic growth for member states.
ASEA and the GSE invite active participation in the AELP which provides channels for accessing opportunities in other African exchanges while promoting opportunities within their respective market to investors across the continent.