Burundi Joins Club of East Africa's Capital Markets Regulators

Burundi has joined the umbrella body for regional capital markets regulators, boosting the efforts to deepen East Africa’s markets. The smallest economy in the regional trade bloc will join Kenya, Rwanda, Tanzania and Uganda in the East African Securities Regulatory Authorities (EASRA) formed in 1997 to promote integration of the capital markets.

Burundi is in the process of setting up a capital market with the country’s Central Bank being responsible for its development.

The market regulators have been seeking harmonization of legal and regulatory environment.”Joining EASRA will benefit Burundi by allowing them to benchmark against the experiences and practices of other member regulators,” said Robert Mathu, the chairman of EASRA and executive director of Capital Markets Advisory Council of Rwanda.

“It will allow them to benefit from mutual technical assistance to support the implementation of the objectives of the East African Community Treaty and the regional integration of the capital markets,” he said.

The process to bring Burundi on board started in 2008 when EASRA visited the Central Bank of Burundi, who agreed to set up a capital markets desk.

The different development stages of the individual countries was said to be a challenge as the priorities of the regulators differed.

While appreciating the advancement of the Kenyan market, Mr Mathu said it provided lessons for the other markets and harmonisation allowed free flow of capital in a market with a population of more than 126 million people.

“The recent Bank of Kigali IPO was oversubscribed as we tapped into the size of the market which will be broadened by inclusion of Burundi,” said Mr Mathu. Kenya, which is the oldest capital market in the region, is eyeing demutualisation.

The Rwandese stock market which was founded in 2007, started off with demutualisation, borrowing from the Kenyan experience.

The partnership among East African capital markets has seen several IPOs across the market and cross-listing of some stocks. Kenyan companies have become dominant in the East African bourses with seven of the 14 listed companies in Uganda being Kenyan, five in the Tanzania’s 16 and two of the Rwanda’s three .

“Co-operation among regulators is key to unlocking the region’s potential, as the capital markets are an important source of long-term financial resources to support productive economic activities in the region,” said Gaspard Sindayigaya, governor of Burundi Central Bank.