CoSSE Chair on capacitating green projects, deepening regional integration of exchanges

The Botswana Stock Exchange has been reappointed as the secretariat for the Committee of Sardex Stock Exchange, with Thapelo Tsheole serving as the board chair. The Sardex Exchange, comprising 14 stock exchanges from 13 member countries, is focused on enhancing regional financial integration and macroeconomic convergence in the region. In a recent interview, Tsheole shared key projects and initiatives aimed at advancing this agenda. One of the primary projects discussed is the advocacy for the decentralized trading of government bonds on stock exchanges within the Sardex region. Traditionally, government bonds were traded through central banks, but efforts are underway to transition this trading to stock exchanges. Tsheole highlighted significant progress in this area, with around 60% of the project completed. Another key initiative is the harmonization of stock exchanges in the region, supported by funding from the African Development Bank. This project seeks to operationalize an interconnectivity platform for African capital markets, fostering collaboration and standardization of listing requirements and trading rules. Additionally, Tsheole noted a project sponsored by FSD in Kenya to kickstart the green bond market in the Sardex region. The initiative involves assessing the current landscape, developing a pipeline of green bond listings, and providing support to countries looking to launch their green bond programs. Furthermore, an EU-sponsored project aims to stimulate the business environment in the Sardex region, particularly focusing on improving access to capital markets for small and medium enterprises (SMEs). These projects are part of a broader effort to build capacity and promote sustainability across Sardex stock exchanges. In response to questions about progress and challenges, Tsheole emphasized the collaborative efforts among member countries. He highlighted the active participation of all 14 stock exchanges, with significant advancements in decentralizing government bonds trading. Despite varying levels of development across countries, approximately nine exchanges have made substantial progress in this area. Regarding concerns about smaller stock exchanges potentially disrupting regional collaboration, Tsheole viewed them as complementary rather than threatening. He noted that smaller exchanges fill strategic niches and enhance market access for specific segments, boosting overall market efficiency. The vision for a pan-African stock exchange was also discussed, with a focus on interconnecting existing exchanges rather than consolidating into a single entity. By harmonizing listing and trading requirements, exchanges aim to facilitate cross-border trading and deepen regional integration. Green financing emerged as a critical focus, with plans to expand green bond issuances across the region. Efforts are underway to identify institutions capable of issuing green bonds, develop tailored listing rules, and set benchmarks for green finance within the Sardex region. By enhancing regulatory capacity and market awareness, Tsheole anticipates increased green bond activities in the future. In reflecting on the general state of exchanges in the region, Tsheole acknowledged challenges in new listings and market dynamics. However, he emphasized the importance of innovation and diversification in response to changing market conditions. Initiatives such as the launch of an SME platform in Botswana demonstrate a commitment to supporting smaller companies and promoting market growth. As Tsheole looks ahead to his new term, he remains focused on advancing projects that promote greater regional integration, sustainability, and market development within the Sardex region. The collaborative efforts of member exchanges and supportive partnerships with international organizations underscore a commitment to driving positive change in African capital markets.