Nigerian Capital Market Update
Across Africa
In West Africa, Ghana experienced its first default on sovereign debts, while AELP kicks off Phase 2 to boost cross-border
securities trade.
Ghana Defaults on Sovereign Bonds
The Ghanaian Finance Ministry in December 2022 announced the suspension of
payments on selected sovereign external debt including its Eurobonds, commercial
loans and most bilateral loans, calling the decision an "interim emergency
measure". The Ministry further disclosed this interim measure, pending agreements
with all relevant creditors, was necessary to prevent a further deterioration of
Ghana's fiscal situation and preserve its limited international reserves.
Consequently, Fitch downgraded Ghana's credit rating from "C" to Restricted
Default (RD).
The Ghanaian government has completed the first phase of meeting the conditions
for a $3bn extended credit facility from the IMF aimed at restoring fiscal stability and
investor's confidence. This includes the completion of the Domestic Debt Exchange
Programme (DDEP) with 85% participation rate recorded.
African Exchange Linkage Project (AELP) Phase 2
The African Exchange Linkage Project (AELP), a flagship project between African
Securities Exchanges Association (ASEA) and the African Development Bank Group to
link African capital markets launched the AELP Trading link in December 2022. This e-
platform would allow investors in the listed countries to trade shares on other African
exchanges through a single and centralised platform. This milestone would foster cross-
border trading and free movement of investments in the continent.
Additionally, the ASEA and the Bank Group kicked of the Phase 2 of African
Exchanges Linkage Project (AELP) through signing an agreement for a $600,000 grant
to expand the number of linked African exchanges from 7 to 15. The AELP is a flagship
project of ASEA and the Bank Group to link African capital markets, thereby promoting
cross-border securities trading, increasing liquidity and diversifying investment
opportunities for investors.
Listing rules for Nigeria Technology Board
The Securities and Exchange Commission (SEC) approved the rules for listing on
Nigerian Exchange Group (NGX) Technology Board in December 2022. This
specialised platform aims at wooing tech-based companies to list and raise capital
on The Exchange given the stringent requirements for listing on the Main Board.
This represents a game changer for African tech companies to expand their funding
sources beyond private equity investments.
Fundraising for Ethiopian Exchange
Ethiopia took a giant step in establishing its first stock exchange by initiating the fund
raising for the Ethiopia Securities Exchange (ESX). Ethiopia has begun selling shares
of ESX stock exchange to finance its establishment in 2024. The aim is to raise 75% of
the funds needed from private investors, while 25% would be held by Ethiopian
Investment Holdings. This initiative aims to open up the economy to private-led
investments including foreign players.
PwC
The Nigerian Capital Market Update
August 2023
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