Capital markets chiefs in East Africa have set up a sub-committee charged with steering formal coordination in member countries in fresh push to integrate the bloc's fragmented financial markets ahead of planned activation of a monetary union.

The sub-committee, which has been in hiatus for the last seven years, brings together the CEOs and senior authorities from securities exchanges in member countries. 

Heads of central securities depositories across EAC are also part of the new-look sub-committee.

The revival of EAC's capital markets sub-committee follows a directive from the 18th Meeting of the Sectoral Council on Finance and Economic Affairs that called for its reconstitution.

Cordination and oversight

In a statement released on Monday, the EAC noted that the revival of the capital markets team seeks to restore regular oversight and coordination that had been absent since 2019, even as integration efforts continued in fits and starts. 

“The last engagement of chief executives under this sub-committee was in 2019. Since then, integration efforts have continued, but without the regular coordination and oversight that this committee was established to provide,” said Mr. Dickson Ssembuya, Director of Research and Market Development at the Capital Markets Authority Uganda, who chaired the meeting on behalf of Ms. Josephine Okui Ossiya.

“Today’s meeting represents an important step towards restoring that collaboration and ensuring that all EAC capital markets move forward together,” he said.

Monetary union looms

Plans are underway by the regional bloc to realise monetary union, a long-term objective that would see deeper financial markets integration in the bloc.

Currently, East Africa's capital markets remain small, illiquid and segmented, with limited cross-border listing and investment activity.

Mr. Aime Uwase, Director of Planning at the EAC Secretariat, underscored the strategic importance of the meeting, noting that strong coordination among regional institutions is essential to building integrated, efficient and resilient capital markets capable of mobilising investment and supporting sustainable development.

“The resumption of the Capital Markets Sub-Committee’s activities comes at a critical time as the Community advances preparations for the East African Monetary Union,” Mr. Uwase said.

The Director called on partner states to maintain a shared commitment to developing capital markets that are efficient, inclusive, resilient and supportive of the broader objectives of the monetary union.

Among the key outcomes of the meeting was the endorsement of updated terms of reference for the sub-committee, reaffirming its role as the principal technical and policy coordination mechanism for regional capital markets integration.

Revised framework

The revised framework broadens participation to reflect the expanded membership of the EAC, which now includes the Democratic Republic of Congo and Somalia and strengthens the sub-committee’s mandate in areas including regulatory harmonisation, market development, product diversification and the interlinking of regional financial market infrastructure.

The meeting called for the development of regional business requirements to inform the design and implementation of a regional capital markets. 

Additionally, the sub-committee reviewed progress made under previous capital markets integration initiatives undertaken during the diagnostic stage for the establishment of the East African Monetary Institute (EAMI).

The EAMI, once operational, is expected to serve as the precursor to a regional central bank. Its diagnostic work has already identified gaps in market infrastructure, regulatory convergence and data sharing that the sub-committee will now be expected to help close.

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