Nigeria Proposes Linking 10 West African Bond Markets

Nigeria is proposing a regional capital market integration framework involving 10 West African countries to ease cross-border investment, deepen bond trading and unlock long-term financing for infrastructure and economic growth.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Tuesday at the S&P Global Ratings Africa Summit in Lagos, where he said fragmented capital markets across the region were limiting access to the scale of financing required to support economic development.

Oyedele said no single market in the region was sufficiently deep to attract the volume of long-term investments needed to fund infrastructure and drive sustainable growth, making greater cooperation among countries imperative.

Under the proposed framework, Nigeria is advocating a regional capital market passport regime that would allow issuers approved in one participating country to raise funds across other markets without undergoing separate regulatory approval processes.

The proposal also includes a unified investor identification system that would enable investors registered in one market to purchase bonds and equities across the region without repeating registration and onboarding requirements.

The minister said Nigeria was equally pushing for the integration of regional trading, settlement and payment infrastructure to enable securities transactions to be settled directly in local currencies, thereby reducing dependence on the United States dollar.

The proposed integration would cover Nigeria, Ghana and eight francophone countries that share the CFA franc and a common central bank. They are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo.

Oyedele said existing regional initiatives, including the West African Capital Markets Integration Council, the African Exchanges Linkage Project and the Pan-African Payment and Settlement System (PAPSS), provided a foundation for the proposed integration. “The task now is to join these pieces together,” he said.

Beyond removing regulatory and operational barriers, the proposed reforms would include the development of a regional local-currency bond index and a credit enhancement facility to support cross-border infrastructure financing.

The credit enhancement facility is expected to strengthen the capacity of countries to attract long-term capital for projects that may otherwise struggle to secure funding from individual domestic markets.

Oyedele said the broader objective was to create a more integrated investment environment that would attract domestic and foreign investors while improving access to capital across the region.

He also disclosed that Nigeria was targeting investment-grade credit ratings within three years as part of efforts to strengthen investor confidence and improve the country’s access to international capital.

The minister said the government was working towards building a capital market worth at least $1 trillion under its 10-year capital market plan.

The proposed regional integration is expected to expand investment opportunities beyond national borders, allowing issuers to access a wider pool of investors and providing investors with more opportunities to deploy capital across West Africa.