The three stock exchanges in the West African sub-region have begun a two-day meeting aimed to find ways to harmonise the trading platform, rules and regulations governing trading in shares on the respective markets to pave way for integration of the markets.
Officials of the Ghana Stock Exchange, the Nigerian Stock Exchange and the Abidjan based Bourse, Regionale des Valeurs Mobilieres (BRVM) that serves the eight Francophone countries, said adoption of common rules and laws to govern operations within the exchanges was a necessary first step to full integration.
The creation of a single stock market would allow the stock exchanges to grow and to become competitive on the global market as well as provide investors and companies a large market within which to raise capitals, they said.
The West Africa Monetary Institute (WAMI) is already working on the integration of the Ghana and Nigeria Stock Exchanges as a first step to the integration of capital markets of member countries of the West Africa Monetary Zone, which is expected to adopt a single currency by 2009.
Mr Mare-Odiake Chris Okolie, Director of Operations of WAMI, said to ensure rapid harmonisation of operations on three exchanges, the partners must work towards uniform definition of concepts.
He said they must first overcome the harmonisation of payment and settlement system, laws and reporting rules that currently inhibit transactions across markets.
The Director General of BRVM, Mr Jean-Paul Gillet, said although the process would be dogged by legal and policy hurdles, there was the need to persevere to bring into reality the integration of the markets.
"I am happy about the setting up of committees to look into the process and see how best to implement the decisions," he said.
Binos Dauda Yaroe, General Manager of the Nigerian Stock Exchange, said there was the need to go along with regulators of the industry in the respective countries to enable them to understand the necessity of integrating the markets.
This would help remove any suspicion as to the direction of regulating the market.
Mr Kofi Yamoah, Managing Director of the Ghana Stock Exchange, 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 legal and financial obstacles must be removed.
He said: "Integration requires that the respective barriers, such as tax, legal and regulatory regimes, which do not permit the free flow of capital be examined and dealt with."
This calls for the harmonisation of both the regulatory and operational framework through agreement on the use of minimum standards.
The Accra meeting, which is a follow up to one held in December last year, would come out with an action plan to move the process forward.