SECTIONS
African Capital Markets: Challenges and Opportunities

EAST AFRICA

AUTHORS

Aly Ramji
Director, Mediapix Limited


Virginia Wairimu
Research Analyst, Mediapix Limited


Martin Mwita
Research Analyst, Mediapix Limited


Rufus Mwanyasi
Executive, Canaan Capital 

The East African Community (EAC) is the fastest-growing economy in sub-Saharan Africa in the past three years. The EAC, which includes Kenya, Tanzania, Uganda, Rwanda, Burundi, and South Sudan, has a combined population of 172 million and a combined GDP of USD172 billion. The EAC has developed the Capital Markets Infrastructure, a technology platform linking the capital markets of the partner states by connecting their exchanges and central securities depositories.
Kenya’s equity market, the Nairobi Securities Exchange (NSE), is the most vibrant and diverse in the region. In addition to its main market, it has an alternative investment market and a growth enterprise market. It lists a wide range of debt securities from government and corporate issues to REITs and an exchange-traded fund (ETF) based on gold bullion.
Tanzania is a smaller but growing market. Incentives to issuers include reduced corporation tax, tax deductibility of IPO costs, and no capital gain taxes for investors or stamp duty on transactions. Rwanda’s incentives also include an exemption from capital gains taxes. The Capital Market Authority of Rwanda has launched a capital market master plan setting strategy for the next 10 years.
Future plans for the EAC are focused on establishing a single market in financial services among EAC partner states, with a view to making financial products and services available to all at competitive prices.

Kenya

Tanzania

Tanzania

Uganda

Rwanda​

Rwanda​

Do you know....?

 

Question: Which country in East Africa issued a sovereign green bond in 2019?

YOU'RE RIGHT!

Answer: Kenya. Kenya’s first green bond raised 4.3 billion shillings ($41.45 million) to build environmentally friendly student housing. Although the Rwanda Green Fund finances projects that address climate resiliency and poverty reduction, it does so through grants, innovation investments, and credit lines. Uganda is encouraging foreign direct investment in renewable energy development, not currently issuing green bonds.

VERY CLOSE!

Answer: Kenya. Kenya’s first green bond raised 4.3 billion shillings ($41.45 million) to build environmentally friendly student housing. Although the Rwanda Green Fund finances projects that address climate resiliency and poverty reduction, it does so through grants, innovation investments, and credit lines. Uganda is encouraging foreign direct investment in renewable energy development, not currently issuing green bonds.