By Sharon Chweya
The World Bank had previously funded the unified regional bourse project through a grant of $26 million. However, the East African governments are rather slow to conclude their key financial sectors reforms before the 2023 deadline.
The EAC Financial Sector Development and Regionalization Project (FSDRP) was implemented in 2011 with the implementation period ending on 30th September 2019.
The regional project was implemented to foster regional integration and give room to East African economies to achieve monetary union.
The financial reform as outlined in the FSDRP aims to electronically link the EAC member countries’ stock markets, develop a regional bond market than enables easy retail payments, synergizing the countries financial laws and market regulations and strengthening the market’s participation through prompt training.
The FSDRP has six core components; financial inclusion and strengthening market participants, mutual recognition of supervisory agencies, integration of financial market infrastructure, development of the regional bond market and capacity building. The FSDRP will aid in cross-regional mobile banking in EAC members and support of a task force at the EAC Secretariat for compliance with international principles in banking, pension, and insurance.
The implementation among East African countries is slower than expected due to a lack of political morale among the EAC member countries.
The EAC member countries have delayed the implementation program of the joint stock market since 2015, which is quite alarming since the World Bank plans to lay the fundamental and applied groundwork for the regional single currency regime by 2023.
By 2018, the cost of the FSDRP project rose by an additional $1.8 million due to the member’s delays. The contracted software company, Pakistan-based Infotech Private Ltd, was assigned duty to link the Nairobi Securities Exchange, Uganda Securities Exchange, Dar-es-Salaam Securities Exchange, and Rwanda Stock Exchange to enable then run as a single market. The company withdrew its services due to a breach of contract after a non-payment worth $777,649.
The CMA report released last week showed that there is no progress made so far in the FSDRP project.