The West Africa Monetary Institute (WAMI) says it is working to ensure the integration of the Ghana and Nigeria Stock Exchanges, beginning next year.
This would be the first step to the full integration of capital markets of member countries of the West Africa Monetary Zone, which would adopt a single currency by 2009.
Mr. Mare-Odiake Chris Okolie, Director of Operations of the Institute, who made the announcement, said a grant had been secured to facilitate the process through improvement in market infrastructure and the security settlement system to promote online real time payment.
Besides, WAMI would make efforts to develop stock exchanges in the Gambia, Sierra Leone and Liberia.
Mr. Okolie was speaking at a meeting on the integration of West African Stock Markets hosted by the Ghana Stock Exchange and attended by a delegation from the Nigerian Stock Exchange, Securities and Exchange Commission, brokers and other stakeholders.
He said the idea to put in place a single, safe and integrated financial system in the sub-region was to allow for an expanded pool of resources from which investors in the area could access capital for their operations.
Mr. Frank Adu Jnr, Acting Chairman, Ghana Stock Exchange Council, said the attempt at integrating the stock markets was good because the respective markets on their own were too small to compete effectively in the global market.
There was therefore, the need to improve the flow and availability of capital to give investors an expanded avenue to explore for capital in other countries of the sub-region instead of relying solely on the markets in their home countries.
He said efforts at reaching a single currency among the countries in the WAMZ was a major step in the integration of the stock exchanges.
Dr Sam Mensah, Government Advisor on Financial Markets, said integration was necessary for the capital market in the Sub-Region to fully participate in the global market.
He said a single market would allow free flow of capital and expand investors' horizon to explore opportunities across frontiers, but for this to succeed the law of one price, access to trade in equities at the same price and obstacles such legal and financial must be removed.
He asked WAMI to create an advisory group to guide and work with the respective Boards of the Exchanges in the process to integrate the markets.
Ms Elsie Addo, Managing Consultant Lawfields, an Accra financial consultancy company, said integration required that the respective barriers, such as tax, legal and regulatory regimes, which did not permit the free flow of capital be examined and dealt with.
This, she said, called for the harmonisation of both the regulatory and operational framework through agreement on the use of minimum standards.
Besides, the regulators needed to benchmark their rules in line with international standards.
She called for the establishment of a committee of markets, made up of regulators, brokers and other market participants to set the minimum standards; adopt a common trading standards as well as establish mechanism for information sharing.
Other areas of concern for the committee should be the engagement of policy makers to look at tax and legal impediments that might possibly work against the single market. She also called for increased market surveillance, enforcement and effective communication to make the intended integration a reality.
Mr. Kofi Yamoah, Managing Director of the Ghana Stock Exchange, said discussions were being held at a time when the Exchange was in the process of full automation, migration of the clearing system to the Central Securities Depository and the implementation of the new rule book.
He said the Ghana bourse would forge greater collaboration with the Nigerian Stock Exchange to promote integration and create a platform for investors in both countries to have access to capital.
Dr Onyemuchi Asinobi, Managing Director, Nigeria Central Security Depository, said Nigeria was committed to the integration of the Ghana and Nigeria Stock Exchanges. He said it was time to move from speeches to take concrete action on integration of the capital markets.
The meeting would explore the various options of integration and adopt an action plan for the smooth implementation of the process.