15 member nations of the Economic Community of West African states, ECOWAS announced the launch of a unified cross-border debt market by 2023, a push that will deepen economic integration in the region as Africa looks to increase trade and services.
This was disclosed in a report Daniel Ogbarmey Tetteh, Director-General of Ghana’s Securities and Exchange Commission in an interview with Bloomberg on Monday evening.
He disclosed that to make the plan possible, regulators and stock exchanges from ECOWAS are working to put in place a passport system that would allow broker-dealers to trade across the different markets, he said, citing that more access to lending pools would reduce borrowing costs in the region.
READ: ECOWAS agrees on pact towards Single Currency Union for West Africa
“One major advantage is that you get a bigger base of investors bidding for a country’s bonds,” Tetteh said.
Tetteh added that it would deepen economic integration in the region, of nearly 400 million people, and “Key to the success of the debt-market plan will be making sure that the countries are on an equal footing in terms of systems and processes.”
He said the dream of the project is to set up a virtual convertible secondary market for bonds and stock where foreign currencies can be traded through the cross border system until ECOWAS agrees on a single currency.
Bloomberg data revealed that debt prices across the region vary, as 10-year debt in local currency range from 5.9% in Ivory Coast and 12.7% in Nigeria to 19.7% in Ghana.
READ: Nigeria, five other West African countries reject ‘Eco’ as region’s single currency
What you should know
West Africa and Africa have been working on several projects to boost economic and financial inclusion in sub-Saharan Africa, to prepare for the African Continental Free Trade.
In June, Nairametrics reported that Nigeria’s Minister of Power, Mr Sale Mamman, stated that the West African Power Pool (WAPP) sub-regional interconnection project, a 330 kV North Core Power Project, would costs stakeholders $568 million to complete.
“The North-Core Project involves the construction of approximately 875 Kilometers (KM) of 330 Kilo Volt (kV) and 24 KM 225 kV transmission lines from Nigeria to Burkina Faso, through Niger and Benin with associated substations,” he said.
In July, the Secretary-General of the Africa Continental Free Trade Area, Mr Wamkele Mene revealed that the Pan-African Payment and Settlement System (PAPSS) would save the continent the sum of $5 billion annually when operational, after he earlier stated that AfCFTA is working on a pilot phase of the Pan-African Payment and Settlement System (PAPSS) which is ongoing in six West African countries, to facilitate the implementation of the agreement.
The Pan African Payment and Settlement System (PAPSS), developed by the AfreximBank is the first centralized payment market infrastructure for processing, clearing and settling of intra-African trade and commerce payments.
