MORGANABLE BUSINESS / MARKETS
Nigeria is proposing reforms to connect West African capital markets and make cross-border bond investment easier. Finance Minister Taiwo Oyedele announced the proposals on Tuesday, November 10, at the S&P Global Ratings Africa Summit in Lagos.
Akure —
Nigeria is proposing reforms to connect West African capital markets and make cross-border bond investment easier. Finance Minister Taiwo Oyedele announced the proposals on Tuesday.
November 10, at the S&P Global Ratings Africa Summit in Lagos. He said fragmented markets limit access to the long-term funding needed for infrastructure and growth.
The proposals aim to reduce regulatory barriers, simplify investor access and improve trading and settlement systems. They would cover 10 countries: Nigeria, Ghana and eight countries that use the CFA franc.
The measures remain proposals, and authorities have not announced an implementation timetable. Their success will depend on cooperation among national regulators and market institutions.
PROPOSED REGIONAL REFORMS
A major proposal is a regional passport for securities issuers. An issuer approved by regulators in one participating country could raise funds in other markets without seeking separate approvals in each country. This could reduce the time and cost of cross-border fundraising.
For companies and governments, the system could widen access to investors beyond their home markets.
An issuer approved in one country could approach investors across the region through a simpler process. Regulators would still need common standards for disclosure, reporting and investor protection.
Without consistent rules and strong enforcement, faster access could create confusion or expose investors to avoidable risks.
Nigeria is also advocating a unified investor identification system. It would allow an investor registered in one country to buy bonds and equities in another without repeating the full onboarding process.
Today, different registration and verification procedures can make cross-border investment difficult.
Investors may submit similar documents several times or rely on separate intermediaries. A shared framework could reduce these obstacles.
Regulators would need to agree on identity checks and secure data sharing. Clear responsibilities would also be important when investors trade in several countries.
Oyedele also called for closer links between regional trading, settlement and payment infrastructure.
The aim is to let securities transactions settle directly in local currencies rather than depend heavily on the US dollar.
This change could reduce currency conversion costs and simplify cross-border payments. It may also support trade and investment.
However, local-currency settlement would require reliable payment channels, clear rules and coordination among financial institutions.
Existing initiatives offer a starting point. Oyedele identified the West African Capital Markets Integration Council, the African Exchanges Linkage Project and the Pan-African Payment and Settlement System as platforms for cooperation. He said the task was to connect these efforts and make them work together more effectively.
FUNDING REGIONAL INVESTMENT
The proposed framework would bring together Nigeria and Ghana, alongside eight francophone countries that share the CFA franc and a common central bank.
These countries are Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
Bringing these markets closer could expand investment choices and help governments and companies reach more investors.
The funding could support roads, energy projects, transport networks and other infrastructure.
However, the countries have different market sizes, regulatory systems and levels of financial development.
Authorities must coordinate laws, tax treatment, disclosure rules and market practices before investors can move smoothly between markets.
The finance minister also proposed a regional local-currency bond index. It could help investors track bond performance and compare returns and risks across participating markets.
In addition, Nigeria wants a credit enhancement facility to support cross-border infrastructure financing. The facility could strengthen the credit profile of eligible projects and make them more attractive to lenders. This may help large projects that require long repayment periods and substantial funding.
The tools would need sound design, funding and governance. Investors would need reliable risk information, while governments must agree on management, eligibility and how losses would be handled. Clear oversight would help protect public resources and maintain confidence in the facility.
NIGERIA’S CAPITAL MARKET AMBITION
The regional proposals form part of Nigeria’s wider effort to deepen its capital market. Oyedele said the country aims to secure investment-grade credit ratings within three years and grow its capital market to at least $1 trillion over 10 years.
A deeper market can give businesses and governments more ways to raise long-term funds. It can also offer households and institutions more choices. Achieving the target will require stable policies, credible regulation and investor confidence.
Nigeria launched its Capital Market Masterplan 2.0 for 2026 to 2036 in October. The roadmap seeks to improve infrastructure, expand the investor base and attract capital.
It targets an increase in collective investment scheme assets from $5.6 billion to $56 billion over 10 years, while annual diaspora investment channelled into capital markets is expected to rise from $4 billion to $10 billion.
The masterplan and regional proposals share a broad objective: making capital markets more accessible for long-term investment.
Regional cooperation could give issuers access to more investors and help investors diversify across markets. It could also strengthen Nigeria’s position as a financial centre in West Africa.
The reforms remain proposals. Governments, regulators, exchanges, payment providers and market operators must agree on the details, set a timetable and explain how the systems will work.
Investors need transparent information, dependable settlement systems and fair rules across all participating markets.
Regulators must ensure that easier access does not weaken checks against fraud, market abuse or financial crime.
If countries coordinate effectively, the reforms could help build a connected West African capital market.
That could support infrastructure, businesses and long-term investment. However, success will depend on implementation, not the announcement alone.
The next test is whether governments turn the proposals into practical rules and shared infrastructure that investors can trust.
Linking approval processes, investor identification, trading and payments could reduce barriers that have kept regional markets apart.
