How the Comesa-EAC-Sadc free trade agreement impacts African markets

The Comesa-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement officially commenced on July 25, 2024, following the ratification by 14 out of 29 member states. This agreement aims to enhance market access and promote the free movement of goods, services, and investments across African economies. In a recent interview on CNBC Africa, Celestin Rwabukumba, CEO of the Rwanda Stock Exchange and President of the African Securities Exchanges Association (ASEA), shared insights on the impact of the TFTA agreement on African markets and provided an update on the RSE market performance. Rwabukumba highlighted the importance of integrating African markets and emphasized the need for increased domestic market development to leverage the full potential of African economies. Despite the quiet trading session in Rwanda, Rwabukumba noted that most companies have announced positive earnings, with dividends being distributed. The RSE indices have shown growth this year, with increased transaction volumes compared to the previous year. However, Rwabukumba stressed the importance of attracting more capital and introducing new products to the market to sustain growth. Speaking on the African Exchanges Linkage Project, Rwabukumba mentioned the progress in linking stock exchanges to create a more integrated market platform. He also addressed the challenges faced by African exchanges in terms of market capitalization and urged for policy reforms to enhance market participation. Rwabukumba highlighted the focus on product development, including offerings related to climate finance and sustainability, as exchanges adapt to changing market dynamics. On the regional front, uncertainties in the global market, including political unrest and currency fluctuations, have impacted investor confidence, leading to capital outflows. Rwabukumba acknowledged the need for stability and highlighted the importance of financial independence for economic security. Looking ahead, Rwabukumba mentioned ongoing mergers and acquisitions in the market, such as Cimero's acquisition of Rival Prime Cement, as indicators of economic growth. While major IPOs are not expected this year, efforts are being made to support small and medium enterprises through innovative market initiatives. Despite challenges such as delistings, Rwabukumba remains optimistic about the growth potential of African markets and emphasized the importance of collaboration and market development to drive sustainable economic growth.