Regulating East Africa’s capital markets

The capital markets landscape in East Africa has experienced significant growth and improvement in recent years, with key players in the region taking steps to develop and operationalize their markets. In a conversation with Wycliffe Shamia, Director of Market Operations at Capital Markets Authority Kenya, CNBC Africa gained insights into the regulatory frameworks and challenges shaping the region's capital markets. Shamia highlighted the progress made by ESC member states, including Kenya, Uganda, Tanzania, and Rwanda, in establishing operational capital markets. While Burundi is also in the process of developing its market, newer ESC members are set to follow suit, indicating a positive momentum for the region's financial sector. Despite the existing legal frameworks and regulatory bodies in place, Shamia emphasized the need for supportive regulations to further stimulate growth in capital markets. He stressed the importance of facilitative regulations that enable market participants to operate efficiently and access funding from both local and foreign sources. Shamia also discussed the significance of harmonizing standards within the region through council directives to ensure a consistent application of regulations across partner states. While progress has been made in standardization, individual states need to work on domesticating these directives to formalize them into law in their respective jurisdictions. One of the key challenges highlighted by Shamia is the need for capital markets to demonstrate their relevance to the economy. He acknowledged that investors have various investment options available to them, including traditional banking instruments, and emphasized the importance of capital markets in providing alternative investment opportunities. Shamia echoed the sentiment that more could be done to showcase the significance of capital markets in driving economic growth and development in East Africa. Overall, the outlook for capital markets in the region remains positive, with opportunities for further growth and innovation supported by strategic regulatory frameworks and collaborative efforts among ESC member states.