Head, Office of the Chief Economist of the SEC, Dr. Okey Umeano, who noted in Abuja, said that the implementation would improve opportunities for diversification and make markets able to perform better.
He said: “This MoU begins to implement something that we have been very excited about. PAPSS makes it easy to trade across Africa. It makes intra-African trade more efficient and we have always wanted it. It was created initially for just the usual everyday trade but we have always wanted it for the capital market because we think that if we can link the exchanges and the markets across the continent, we will have a bigger opportunity set for everybody. So, we have been working on that.
“We have two projects, the West African Capital Market Integration project and the African Exchanges Linkage project, but the problem we have always had was how to settle, how do we make payments happen? If I want to buy Ghanaian stock, do I have to change my naira to dollars and then from dollars back to cedi’s and all that. These were all the problems we had but with PAPSS, we can make these trades more efficient and easier. I can trade in naira and whoever I am buying from in Ghana or wherever in Africa receives in the local currency so this is a good thing and we thank Afrexim Bank.”
He also said: “Given the way the markets are, it improves the opportunity for diversification. It improves the opportunity set everywhere. Let me give you an example, a couple of years ago when our market didn’t do so well, our bond market didn’t do so well we had issues around currency and we had the foreign investors leaving. It was reported that the market in Côte d’Ivoire, the eighth nation in the French union market, did much better.
“So from a fund manager point of view, if I could invest across the markets in the region, it will help my diversification, it will help improve returns, it will help my portfolios. So, I think that there’s an appetite for it. I think that fund managers, pension funds and all that will take advantage of it. So, I think it’s a good thing.”
