Nigeria has proposed an ambitious regional capital market integration framework aimed at enabling businesses and governments to raise funds across 10 West African countries without undergoing separate regulatory approval processes in each participating market.
The initiative is designed to address the fragmentation of financial markets across the region, improve access to long-term financing and attract greater cross-border investment into infrastructure and other productive sectors.
The Minister of Finance, Taiwo Oyedele, presented the proposal at the S&P Global Ratings Africa Summit in Lagos, where he argued that the fragmented nature of regional capital markets had limited their ability to mobilise the substantial funding required for economic development.
Oyedele noted that no single market in the region possessed sufficient depth to independently meet the financing needs of major infrastructure and development projects.
Under the proposed framework, companies and governments approved by regulators in one participating country would be able to raise capital in other member markets without repeating separate regulatory approval procedures.
The arrangement, described as a regional capital market passport system, is expected to simplify securities issuance, reduce administrative costs and improve access to investors across participating economies.
Nigeria is also proposing a unified investor identification system that would allow investors registered in one country to purchase bonds and equities in other participating markets without repeating registration and verification processes.
Other components of the proposal include connecting trading, settlement and payment infrastructure to facilitate transactions in local currencies, alongside the development of a regional local-currency bond index.
The government is also considering a credit enhancement facility designed to support cross-border infrastructure projects and improve their attractiveness to institutional investors.
The proposed framework would cover 10 West African countries, including Nigeria, Ghana, Côte d’Ivoire, Senegal and Benin.
The initiative aligns with Nigeria’s ambition to develop a $1 trillion capital market within the next decade, with regional integration expected to expand the investment opportunities available to domestic and international investors.
The proposed reforms could also improve the ability of businesses to access financing beyond their domestic markets while allowing governments to attract capital from a broader regional investor base.
However, successful implementation will require cooperation among participating countries, harmonisation of securities regulations, improved investor protection and effective coordination among financial market institutions.
If achieved, the initiative could represent a major step towards developing a more integrated West African financial market capable of supporting larger investments and accelerating regional economic growth.
