Government urged to raise funds through the Capital Market
The government has been urged to work towards unlocking the potential of its entities to raise funds through the Capital Market.
The Capital Market Authority (CMA) Assistant Manager for Research and Statistics, Wilberforce Ong’ondo said that Kenya needed to learn from countries such as China and India that have successfully managed to make Capital Markets a key contributor to project finance.
Speaking in Nairobi on Wednesday, Ong’ondo added that the UK and Bretix Authority will continue to raise awareness of opportunities for issuance of Capital Markets products such as Global Depository Notes to raise funds.
“The economy of our country has a huge infrastructural gap estimated at between 2 to 3billion dollars,” said Ong’ondo.
He added that Kenya has favourable factors hence she should leverage on the advantages to source for foreign capital to finance Vision 2030 development projects.
Ong’ondo advised the government to issue longer tenure sovereign bonds to build a reliable yield curve while raising funds to finance its infrastructural projects including energy, manufacturing and agriculture in line with vision 2030.
He said that the CMA aimed at examining global, regional, domestic, political and socio-economic events to facilitate continuing debate on their link with Kenya’s industrial risk and financial stability.
Ong’ondo said that the Financial Technology (Fintech) is gaining currency and the relevance in facilitating transaction process globally.
“The Central Bank is still conducting research on crypto currency and related Fintech innovations to establish viability and risks to enable it provide guidance,” said Ong’ondo.
He explained that change in the London Interbank Offered Rate (LIBOR) or a replacement of the index is likely to affect asset pricing.
“Last year, Financial Conduct Authority (FCA) announced the planned phasing out of LIBOR as the primary benchmark in financial transactions by the end of 2021 and replacing it with Risk Free Rates (RFRs),” he said.
By Merab Auma