AFRICAN DEVELOPMENT BANK GROUP

The African Development Bank Group: Towards Vibrant Capital Markets in Africa

Stefan NALLETAMBY

Director of Financial Sector Development

ASEA 2014 Conference, Kenya

AFRICAN DEVELOPMENT BANK GROUP

PRESENTATION OUTLINE

AFRICAN CAPITAL MARKETS LANDSCAPE1

KEY COMPONENTS TO DEVELOP EXCHANGES IN AFRICA2

AfDB’s STRATEGY3

FINANCIAL SECTOR DEVELOPMENT STRATEGY 2014-20194

AFRICAN DEVELOPMENT BANK GROUP

Global Landscape

• Financial market globalization and regionalization

• Technology and the rising pace of innovation

• The changing role of governments

• Market demand for greater transparency

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African Capital Markets Landscape

Stock Exchanges – Few Listings, Low Liquidity, Relatively Costly

Transaction Costs

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African Capital Markets Landscape 2

Bond Markets – Extremely active and profitable

Financial Markets are improving and positively contributing to financing of the economy

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Key Components to Develop Exchanges in Africa

Financial Literacy/Industry

Talent Pool

Regulation & Supervision

Infrastructure/ Automation

Demutualization Considerations

Regional Integration

Institutional investors

Issuers

Intermediaries

Developing trust between

stakeholders is key

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Overview of the AfDB

AfDB Group

African Development Bank

African Development Fund

Nigeria Trust Fund

In Brief

Established 1963

53* RMCs

25 Non RMCs

26 Representations

Our Clients

Middle-Income Countries

Low-Income Countries

Post-Conflict & Transition States

* Excluding South Sudan

Public & Private Sector

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AFDB’s Strategy for 2013-2022

The Bank’s Ten-Year Strategy aims at inclusive & “green” growth

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AFDB’S FINANCIAL SECTOR DEV STRATEGY 2014-19

FINANCIAL SYSTEMS GOVERNANCE

Increasing access to the underserved,

particularly women and youth

PILLAR I

Broadening and deepening Africa’s financial systems

PILLAR II

PARTNERSHIPStrengthen partnership with MDBs, regional development

banks, and bilateral institutions for maximum

impact in RMCs

INNOVATIONTake lead in promoting

technology toward universal access and innovative products and services

Vibrant, innovative, robust, and competitive financial systems nationally and regionally

AFRICAN DEVELOPMENT BANK GROUP

OFSD’s DIVISIONS

Financial Institutions

Trade FinanceFinancial Inclusion

Financial Markets

• Increasing the financial sector’s responsiveness to the demand for long-term capital

• Strengthening the capacity of financial institutions

• Supporting the development of DFIs

• Facilitating the adoption of sound business and financial management practices within the assisted institutions.

• Work with retail banks, DFIs and MFIs in deploying innovative and commercially viable business models

• Develop financial infrastructure and systems to address access

• Support to Microfinance and Households access to finance

• Design an enhanced set of financial products

• Develop trade finance structures in response to market requirements in Africa

• Promote partnership with key trade finance actors

• Broadening and deepening of the financial sector in the long-term finance market and in creating an enabling environment for Regional Financial Integration.

Supporting Financial Stability is a Cross-cutting theme

AFRICAN DEVELOPMENT BANK GROUP

AfDB: Support to Capital Markets DevelopmentBroadening and deepening the long-term finance market and creating an enabling environment for Regional Financial Integration

ADVISORYAFMI

Cross Cutting Initiatives

Scope of Activities

LENDING

Developing yield curves

Structured vehicles targeting inst’l investors

WAEMU Financial Market Support

Capital Mkts Infrastructure

Capital market ecosystem institutions: rating agencies

Development of Secondary Debt Markets

Sovereign Wealth Fund Implementation

Insurance & Pension Reforms

Regulation and Supervision of Capital Markets

AFMD Knowledge dissemination

tool to promote bond markets

ADBF African Domestic Bond

Index African Domestic Bond

Fund

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THANK YOU

Mr Stefan NALLETAMBY, Director Financial Sector Development Department