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IFC and Kenya’s Central Bank to Help Develop Country’s Bond Market


In Nairobi
Grace Wambui Kibuthu
Phone: +254 20 2759000
E-mail: GKibuthu@ifc.org

In Johannesburg
Daniel Musiitwa
Phone: +2711 731 3175
E-mail: dmusiitwa@ifc.org


Nairobi, April 4, 2008—IFC, a member of the World Bank Group, is working with the Central Bank of Kenya and other stakeholders to help develop the country’s bond market. This will increase long-term financing options for projects in such sectors as housing and infrastructure.

“IFC is keen to work with the central bank and other industry players to create a conducive regulatory environment for the bond market and support potential bond issuers and intermediaries that will bring transactions to the securities markets,” said Evans Osano, IFC Program Manager, at a recent joint stakeholder workshop in Nairobi.

The workshop brought together industry stakeholders who considered global best practices in bond market regulation, structure, trading, and settlement. Participants included representatives from the Ministry of Finance, the Central Bank of Kenya, the Capital Markets Authority, the Retirement Benefits Authority, the Nairobi Stock Exchange, the Central Depository and Settlement Corporation, commercial banks, investment banks, insurance industry, fund managers, and stock brokers. Erik Thedeen, Head of Fixed Income Markets at NASDAQ OMX, and Tom Lawless, former CEO of the Bond Exchange of South Africa, were among the keynote presenters.

“Kenya’s bond market lacks liquidity. There is need to develop the market and encourage transactions that will move capital to infrastructure and other sectors where it is needed most,” said Jackson Kitili, Central Bank of Kenya Director.

IFC, the World Bank, and the Swedish International Development Cooperation Agency have launched the Efficient Securities Markets Initiative to help develop well-functioning securities markets, especially bond markets in Africa. The initiative will help securities market regulators improve their expertise, assist in the design of effective regulatory environments for long-term capital mobilization, and help strengthen marketplaces and institutions that form the core of the securities industry.

The Efficient Securities Markets Initiative works with regulators in East Africa to identify and address the main obstacles to issuing bonds, including market structure and the high costs. The program is also helping market participants introduce measures for strengthening liquidity in the secondary markets using an appropriate market structure.
 
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.