West Africa's stock exchange is pitching itself as a gateway to the fast-growing region, with its chief executive urging international investors to increase their exposure to African capital markets.

"It is time to come to Africa because our markets are based on economies that are growing fast," Dr Edoh Kossi Amenounve, chief executive of the Bourse Régionale des Valeurs Mobilières (BRVM), told IntelliNews in an interview on the sidelines of the European Bank for Reconstruction and Development (EBRD) annual meeting in Riga.

"There is a strong link between the return you can obtain in the market and the growth of our GDP. So it is time to come to Africa. Our capital markets reflect the dynamism of our economies. The returns are very high."

International investors already account for around 30% of assets held in the BRVM market, with the largest groups coming from the US, the UK, France and South Africa.

The Abidjan-based BRVM serves the eight member states of the West African Economic and Monetary Union (WAEMU) — Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo — and is the world's only regional stock exchange spanning multiple sovereign states.

"The BRVM is the fifth largest stock exchange on the continent after Johannesburg, Casablanca, Nigeria and Egypt," Amenounve said. "What we are trying to do is to make our market more dynamic so it contributes more to the financing of our economies."

A central part of that strategy is greater integration across African capital markets. The BRVM is participating in the African Exchanges Linkage Project (AELP), an initiative designed to connect stock exchanges across the continent and simplify access for global investors.

"This project is aiming to connect all the exchanges on the continent so the international investor will have a one-stop shop when they come to the continent," Amenounve said.

Beyond that, the BRVM is seeking to expand beyond its existing francophone footprint. Already fully integrated across the eight WAEMU countries, which share the CFA franc currency, the exchange hopes eventually to incorporate anglophone neighbours.

"We are fully integrated in the West African francophone zone," Amenounve said. "What we are trying to do is see how we can integrate all of West Africa, including Ghana and Nigeria, into the West African stock market."

Such a move would dramatically increase the scale of the region's capital markets. "If we succeed in including Ghana and Nigeria, the West African zone will be the second largest exchange after Johannesburg," he said.

The main obstacle remains the movement of capital across countries with different currencies and regulatory systems. "We have to solve the challenge we have in terms of capital flow between our countries because we have different currencies. It's not easy to move funds from Nigeria to Kenya or from Kenya to the BRVM," he said. "We are trying to find a solution to that. We are trying also to find a link between our central depositories so that can facilitate the AELP project."

Alongside regional integration, the exchange is seeking to attract more state-owned enterprises, private equity-backed companies and domestic corporate champions to its market as it looks to play a larger role in financing economic development.

The exchange currently has 47 listed companies with a combined market capitalisation of around $30bn. Its debt market has grown rapidly and now includes more than 200 listed securities, including sovereign, supranational and corporate bonds, with a total value of roughly $25bn.

The exchange's ambitions are underpinned by the relatively strong performance of the WAEMU economies, which have consistently outpaced much of the global economy despite recent political instability and security challenges in parts of the region.

"We are in a region that is performing very well in terms of economic growth," Amenounve said. "Average economic growth is about 6-6.5% during the last 10 years. We have some leading countries like Côte d'Ivoire, Senegal, Benin and Niger."

Amenounve said the BRVM's strategy is focused on expanding both the number of listed securities and the depth of trading activity, allowing capital markets to play a bigger role in funding development and reducing dependence on bank lending.

"We are trying to deepen our markets, we are trying to have more listed companies, trying to have more listed bonds coming from private companies so we can have a more important contribution to the financing of our economies," he said.

To achieve this, the exchange is pursuing three main avenues to bring new companies to market. The first is encouraging governments to privatise state-owned enterprises through public listings.

The second is working with the private equity industry to create clearer exit opportunities for investors. "That is very important for us because we believe private equity funds can play a key role in transitioning private companies to public companies in many regions of the world," Amenounve said.

Thirdly, the exchange is targeting what he called the region's "national champions”, successful privately owned companies that have not yet tapped public markets.

Alongside increasing the number of listings, the BRVM is seeking to address one of the biggest challenges facing many African exchanges: liquidity.

"In order for the stock exchange to be more attractive, it has to be more liquid," Amenounve said.

The exchange is reviewing its market structure to encourage greater trading volumes. Measures under consideration include increasing the free float of listed companies, splitting high-priced shares to make them more accessible to retail investors and extending trading hours.

The BRVM is also working on introducing market makers to support trading activity. 

Technology and sustainable finance are the twin pillars of the exchange's next five-year strategic plan. The exchange is seeking to position itself as a continental leader in sustainable finance, an area where African capital markets are gradually expanding beyond traditional green bonds.

"We are looking at how we can be a reference on the continent in terms of sustainability, sustainable finance," Amenounve said. "Issuing green bonds can bring something in terms of preventing climate change … issuing GSS bonds, social bonds, gender bonds and so on is very important to make our economy more inclusive. We need inclusivity in Africa."

The BRVM currently has several sustainable bonds listed, including two social bonds, four GSS bonds and one gender bond.

"The BRVM is the second exchange on the continent in terms of sustainability after Johannesburg,” according to Amenounve. 

The exchange's listed companies are currently concentrated in sectors such as banking, telecommunications, agriculture and consumer goods, but Amenounve said broadening that mix is another priority.

"We are now working on how we can bring mining, energy companies and technology companies to our market," he said. "That is our objective: to diversify the companies that are listed on the BRVM."