The East African Community has revived a key regional capital-markets body after a seven-year gap, renewing efforts to connect the bloc’s securities markets and make it easier for capital to move across national borders.
The EAC said its Capital Markets Sub-Committee held its first formal engagement since 2019 from 15 to 17 September, bringing together chief executives and senior representatives from securities exchanges, capital-market regulators and central securities depositories across the Partner States.
The meeting follows a directive from the EAC’s Sectoral Council on Finance and Economic Affairs to resume the committee’s work and strengthen coordination as the region prepares for the East African Monetary Union.
Integration beyond trade
East African integration is often measured through trade flows, border reforms and transport corridors. But a functioning regional economy also requires deeper financial integration. Companies need access to larger pools of capital, investors need efficient ways to buy securities across borders and financial infrastructure needs to settle transactions reliably between markets.
The renewed capital-markets agenda is intended to address those issues. The EAC says the committee endorsed updated terms of reference that broaden participation to reflect the Community’s expanded membership and strengthen its mandate in regulatory harmonisation, market development, product diversification and the interlinking of financial-market infrastructure.
The EAC now comprises Burundi, the Democratic Republic of Congo, Kenya, Rwanda, Somalia, South Sudan, Tanzania and Uganda, creating a regional market with widely differing levels of capital-market development.
Why connectivity matters
Kenya has the region’s deepest securities market, while several neighbouring markets are much smaller. Greater connectivity could allow issuers to reach investors beyond their home countries and give investors access to a wider range of shares, bonds and other financial products.
The EAC meeting identified the need for a comprehensive regional business-requirements specification to guide a capital-markets connectivity framework. The objective is to support more seamless cross-border activity rather than requiring each market to function as an isolated national system.
For businesses, a more integrated market could broaden the investor base available for raising long-term capital. For pension funds and institutional investors, it could create a larger investable universe. For governments, deeper markets can support domestic and regional financing while reducing excessive dependence on external sources of capital.
A project with a long history
Regional capital-market integration is not a new ambition. The EAC has worked on financial-sector integration for years, including initiatives linked to preparations for the proposed East African Monetary Institute. The fact that the sub-committee had not met formally since 2019 illustrates one of the difficulties: integration requires sustained coordination between regulators, exchanges and infrastructure providers whose national markets operate under different rules and levels of development.
The renewed committee will therefore need to turn regional policy objectives into detailed technical standards. Regulatory alignment, investor protection, settlement systems, licensing rules, currencies and technology all affect whether a cross-border market can operate efficiently.
Capital markets and the monetary-union ambition
The EAC is linking the work directly to preparations for the East African Monetary Union. Financial integration is an important component of that longer-term ambition because a common monetary area requires stronger coordination between financial systems as well as macroeconomic policy.
That does not mean East Africa has created a single stock exchange or that a monetary union is imminent. The current step is institutional: restoring the technical coordination mechanism responsible for advancing capital-market integration and developing the requirements for greater connectivity.
From regional ambition to usable infrastructure
The opportunity is substantial. East Africa’s economies need long-term financing for infrastructure, industrialisation, housing, technology and growing private enterprises. Bank lending alone cannot meet all of those needs, particularly for projects requiring patient capital.
Deeper capital markets can help diversify financing, but national markets with limited listings and liquidity may struggle to reach scale independently. Regional integration offers a way to combine those markets without necessarily eliminating national institutions.
The test now is execution. The committee has restored a forum for coordination and agreed a wider mandate. Its next challenge is to translate that into interoperable systems, harmonised rules and cross-border products that investors and issuers can actually use. If that happens, East Africa’s integration project would move beyond the movement of goods and people towards something equally consequential: the movement of capital.
Sources
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