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Capital Market Integration


The West African Capital Market Integration Council (WACMIC) comprises the Heads of the Stock Exchanges in the UEMOA Zone, Cabo Verde, Ghana, Nigeria and Sierra Leone.  Morocco is an Associate Member while Guinea, The Gambia and Liberia are observers. The objective of the WACMIC which was established in 2013 was to spearhead the integration of capital markets in the region. The Council adopted a three-phased approach to capital market integration; namely: Sponsored Access (Phase 1), Qualified West African Broker (QWAB) (Phase 2) and Fully Integrated West African Securities Market (WASM) (Phase 3).

The Council harmonizes the rules and regulations for the issuance and trading of financial securities across the Economic Community of West African States (ECOWAS). Specifically, it is tasked with managing the implementation of the processes that will facilitate the creation of an integrated capital market in West Africa. The designing of the policy framework which was hitherto carried out by WACMIC has been transferred to the West African Securities Regulators Association (WASRA), following the withdrawal of the latter from WACMIC.


An Overview of the 3-Phased Approach


Phase 1: Sponsored Access

A licensed foreign dealing member/broker or Sponsored Participant (SP) accesses the local market through a licensed dealing member/broker or Sponsoring Member (SM). To facilitate this process, Sponsored Access rules and related agreements are executed between the SM and the local exchange, as well as between the SM, local Exchange, and the SP, following which the local Exchange would grant approval. Thereafter, these agreements are lodged with the foreign securities exchange, as well as the local and foreign statutory regulators and central depositories. All orders emanating from the SP would pass through the risk management system of the SM before reaching the exchange. This is to ensure that orders are executed speedily, while agreed transaction limits are respected. The SM is solely responsible for all risk introduced by the SP.

Phase 2: Qualified West African Broker (QWAB)

This approach is an improvement on the Sponsored Access, as it allows the licensed foreign dealing member/broker to access the local market directly. The conditions are however more stringent than those of the Sponsored Access Phase, especially with respect to risk management. However, the licensed foreign dealing member/broker assumes the same status as the local counterpart in allowable areas of the market. For this Phase to become effective, listing requirements and governance structures in the participating markets would have to be harmonized, training and certification standardized, and a common passport introduced. The commencement of this phase would depend on the success of the first phase.

Phase 3: Fully Integrated Market/West African Securities Market (WASM)

In this Phase, there will be a common (virtual) securities market mirroring all participating exchanges. However, orders would be routed to, and settled in the market of listing through an order routing technology. Although securities on the WASM would be quoted in USD dollars, settlement would be in the local currency of the market of listing. A virtual International Central Securities Depository (ICSD) would complement the WASM in securities clearing.


Status of Implementation of the West African Capital Market Integration (WACMI) Programme 


In 2019, a meeting of Member States’ Experts on Capital Markets, comprising representatives of Ministries of Finance, Securities and Exchange Commissions, Stock Exchanges, Securities Depositories, Capital Markets Operators (CMOs), the West African Securities Regulators Association (WASRA) and the West African Capital Markets Integration Council (WACMIC), was held at ECOWAS Commission in Abuja on June 3, 2019. The purpose of the meeting was to consider and validate the Charter establishing the West African Securities Regulators Association (WASRA) and the draft WACMIC Operational Rules for phases 1 and 2. 


At the end of the Meeting, the Experts validated the WASRA Charter and WACMI Operational Rules and the following recommendations were also made:

  1. That the ECOWAS Convergence Council approves the Charter Establishing WASRA as the body regulating the Capital Market in ECOWAS.  The Convergence Council to further recommend the WASRA Charter to the Council of Ministers for adoption in line with Article 53 of the Revised ECOWAS Treaty;
  2. On WACMI Rules, WASRA made some observations and undertakes to transmit those observations for inclusion in the WACMI rules by end-June 2019; and
  3. Subject to paragraph 2, the WACMI rules be validated and recommended to the ECOWAS Convergence Council for approval.
  4. The ECOWAS Convergence Council to recommend the Phases 1 and 2 WACMI Programme to the Council of Ministers for adoption.

Following the validation of the WACMI documents, WAMI in collaboration with WASRA, WACMIC and ECOWAS held an inaugural Biennial Workshop and Conference, from October 27 – 29, 2019, in Abidjan, Cote de Ivoire.  The themes are as follows:

    • Workshop: Held on October 27, 2019 with the theme “Regulating and Supervising Cross-border Transactions towards an Integrated Capital Market in the ECOWAS Zone”. The Workshop was attended by forty-four (44) officials from the regulatory and operational institutions in the capital market.  The papers considered included:
    • Capital Market Integration (CMI): Where do we stand and future perspectives
    • Cross-Border Supervision and Regulations: The International Organization of Securities Commissions’ (IOSCO) Toolkit
    • Principles Regarding Cross Border Supervisory Cooperation
    • Market Infrastructure in an era of Integration and Cross-border Transactions: Available Options
    • Payment, Clearing and Settlement System in an era of Integration and Cross-border Transactions
    • Integrated Markets Initiative. 

Conference: the biennial West African Capital Market Conference (WACMaC) was held from October 28 – 29, 2019 in Abidjan, Cote d’Ivoire, on the theme “Infrastructure Financing across the Region and Capital Market Integration”. The Conference which was declared opened by the Vice-Président of the Républic of Côte d’Ivoire, SEM Daniel Kablan DUNCAN, presented the West African sub-region and indeed Africa, the opportunity to address pertinent issues relating to the orderly growth and development of the regional and continental capital markets.   Some of the topics discussed during the Conference were: Financing Infrastructure Deficit in the Sub Region through the Capital Market; Promoting Sustainable Finance for Infrastructure Development; Capital Market Integration and FinTech - What does Technology Provide for the West African integration?; Investor Protection in the Era of market integration; Market integration : Perspectives of Market Participants; Contribution of Investments Funds to Financing the Region’s Infrastructure Needs; The Future of the Capital Market in the ECOWAS Sub-Region;  Creating Enabling Environments and Capacity Building to support the Integration Process in the Sub-Region.

After various panel’ discussions by experts in the Capital Markets, the following recommendations were made to help the development and integration of the region’s capital markets:  

  1. There is need for the use of local currency denominated debt, as its more advantageous for the sub region;
  2. Member States to develop framework to building an efficient public financial management structure;
  3. There is an urgent need for long-term, stable income and some level of guarantee to increase investment in infrastructure;
  4. The need for intergovernmental relationship is paramount, therefore, collaboration between and among governments in the sub region should be encouraged;
  5. The structuring of infrastructure financing product should take into account the need of investors in order to attract more investments and the stock exchanges in the sub region should create an environment for listing and trading of infrastructure financing product;
  6. There is need for capacity building for the development and management of Islamic financing product, and other related innovative products, in the sub region;
  7. Both regulators and operators should continue to initiate programmes that can further help in developing markets in the sub region;
  8. Member States with less developed markets should invest in disruptive technology that can help bring them at par with others without necessarily reinventing the wheel;  
  9. It is important for markets in West Africa to ensure appropriate pricing mechanism, quality and standardization of products across the markets;
  10. The region should work towards ensuring the credibility of data and adequate enforcement of rules as it relates to full disclosure and transparency in the market;
  11. There was the need to speedily approve and commence the implementation of the WACMI programme in order to give the benefits of access to long term finance and economies of scale to the region;
  12. Member States were encouraged to relax regulatory rules which limit pension funds investment in infrastructure while ensuring appropriate risk mitigants and guarantees to protect the fund;
  13. Public officers in Member States were encouraged to personally initiate policies and measures that can help the achievement of the integration agenda, as the benefits of larger market to the development of Member States cannot be overemphasised;
  14. Considering the approval process in some countries, the conference recommended a gradual implementation of the integration programme, with prepared Member States at the forefront;
  15. Regulators should be more sensitive to realities in their local markets, and continue to improve their regulatory and supervisory capacities; and
  16. There is the need for Member States to develop the required regulatory framework to aid regional integration. This include a review of securities laws, tax regimes and repatriation of funds

In 2020, the outbreak of the Coronavirus 2019 Pandemic (Covid-19) constituted a drag on the progress of the integration efforts as movement across the international borders were restricted.  Despite the development, WAMI in conjunction with the WACMIC and the WASRA continued to work towards realising the capital market integration objective of the WAMZ.  The Team utilised the virtual platform to meet and designed programmes under the guidance of the African Development Bank (AfDB) who had indicated its readiness to fund the WACMI Programme, specifically, Phase 2 which is the Qualified West African Brokers (QWAB) stage.


WACMI Funding from African Development Bank (AfDB) 


The WACMI Stakeholders, comprising WASRA, WACMIC and WAMI using the virtual platform finalized the Proposal Report for the funding of the WACMI Phase 2 Project.  The Proposal which was directed to the Capital Development Trust Fund (CMDTF) of the AfDB seeks to implement the following activities:

  1. the harmonization, validation and adoption of the West African capital market rules;
  2. the design, development, hosting and launch of the WACMIC data portal and website (incorporating a database of West African capital markets corporate listings and product offerings, authorized brokers and key support participants;
  3. conducting needs assessment studies on the state of the capital markets in The Gambia, Guinea, Liberia and Sierra Leone and the development of an implementation roadmap for the inclusion of each market in the integrated WACMI Project; and
  4. capacity building programs aimed at key regional capital markets stakeholders on the implementation of harmonized rules and regulations for securities trading and settlement.


The Project with an implementation timeframe of 30 months was estimated to cost US$1,257,143. The requested grant from the Capital Markets Development Trust Fund (CMDTF) is US$ 850,000 which is 68.0 percent of the project cost. The remainder of US$ 407,143 (32.0 percent of project cost) was to be contributed by the sponsors (WACMIC and WASRA) and executing agency for the grant, WAMI.  The Proposal has been approved and currently at the implementation stage.


Challenges and Recommendations for the Implementation of the Capital Market Integration Programme

The challenges inhibiting the progress of the capital markets integration efforts of the WAMZ, and associated recommendations remained as outlined in Table 1.  In addition, the Covid-19 pandemic which affected international movements accentuated the constraints to achieving capital markets integration during the period: 


Table 1: WACMI Challenges and Recommendations





Cash settlement challenges arising from different currencies


The ECOWAS single currency programme remains pertinent in order to overcome the settlement challenges in the Zone.  For now, the implementation of the quoting and trading framework using local currencies could be explored.  Alternatively, attention should be given to the Afreximbank proposed ongoing platform for cross border trade settlement (Pan African Payment System Platform – PAPSP).


Uneven capital market development among  ECOWAS


WACMIC to provide necessary assistance towards the development of the capital markets in Member States.


Low awareness at various levels such as policy and market operators  


  1. The implementation of the WACMaC Conference in 2019 was a welcomed development and more of such fora will help in creating the necessary awareness.
  2. The Exchanges should continue to provide adequate information about the WACMIC programmes to participants in their markets

Non-existence of a common platform for information sharing


The launch of the WASRA’s website was commendable.  In addition, the need for the WACMIC website is important in order to ensure the availability of real time market data for market participants.

  1. .

Lack of common forum for interaction between WASRA and WACMIC


Need for regular meeting between WACMIC and WASRA.


African Development Bank Debt Market Development Fund 

In order to develop the debt markets in The Gambia, Guinea, Liberia and Sierra Leone, and bring them closer to the level obtainable in Ghana and Nigeria, WAMI sought and obtained approval for a grant of UA 1.5 million under Pillar III of the Transition Support Facility (TSF) in 2020.  The fund will be used to provide technical assistance and capacity building for the debt markets development in The Guinea, Sierra Leone, the Gambia and Liberia under the Domestic Debt Markets Development in the West African Monetary Zone (DDM WAMZ) Project.  The Management of WAMI has constituted the Project Implementation Unit (PIU).