William Ruto has challenged African countries to develop own capital markets

Nairobi, Kenya: Deputy President William Ruto has challenged African countries to develop their capital markets to enable them provide alternative sources of finance for long-term productive investments.

He said that development of stock markets will diffuse stresses on the banking system by raising long-term project based capital.

The Deputy President made the remarks today when he represented President Uhuru Kenyatta to officially open the18th African Securities Exchanges Association (ASEA) Annual General Meeting (AGM) and Conference at Leisure lodge in Kwale County.

He said that citizens need to be sensitized to appreciate the wider role of exchanges apart from providing dividends to investors.

“We need to get more of our people appreciate the importance of stock exchanges in the development of our economy. We should let capital drive our politics that’s why as government, we have encouraged the Capital Markets Authority to get more companies listed on the Nairobi Stock Exchange to access cheaper capital for development,” he said.

Mr. Ruto noted the stock exchanges have strong socio-economic benefits citing development of infrastructure via long dated bonds and asset backed securities.

  He noted Africa was on the rise economically adding that stock exchanges will encourage savings and investment in the continent by creating opportunities that encourage a thrift culture.

Mr Ruto said that African continent has been identified as the fastest growing with over 5 percent annual economic growth rate and with 10 of her countries posting the highest returns on investment.

He said that this was good news but more needs to be done to put the continent on the growth path.

“The Savings and investment ratios of most countries is well below 10% of GDP, we should encourage broader ownership of productive assets by small savers to enable them benefit from economic growth and wealth distribution,’’ he said

“For example in Kenya, we are trying to discourage people from excessive obsession for land ownership-you can still be Kenyan without owning land. You can invest in stock and fetch better returns.”

He said the development of regional markets will expand intra-Africa trade that stands at a paltry 12 percent way below that of other continents.

“ As policy makers in this region, we are discussing the possibility of a political federation in the five East African Community States,’’ he said adding ‘we are also committed to getting the five  trading blocks in the region that commands a market of over 1.3 trillion dollars to drive this dream of Africa on the rise,”.

 

 Rwanda Finance Minister John Rwangoma said African capital markets should position themselves as engines of growth in managing risk on agricultural, mineral, interest rates and currency prices.

“Attracting Foreign Direct Investment  is sometimes very difficult   that is why we in Rwanda are developing  our financial sector along our vision 2020 especially the capital market to mobilize resources for development, ’he said.

Cabinet Minister Phyllis Kandia who represented Finance Minister Joseph Rotich said the conference has provided a platform for delegates to discuss issues of common interest for the development of African stock exchanges and capital markets.

 She said the conference will showcase the growth of Africa as reflected in the diversity of products being offered by African Exchanges.

Others present were Kwale Governor Salim Mvurya, Lungalunga MP Khatib Mwashetani, and the chairman Nairobi Securities Exchange Eddie Njoroge.

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