Capital market integration in East Africa: inadequacy of East African Council of Ministers directives on capital market integration

Abstract

The East African Community (EAC), formed through an agreement between Uganda, Tanzania, Kenya, Rwanda and Burundi has provided the impetus for the integration of affairs in the region. The integration especially of capital markets in the region is expected to bring the following benefits to the people of the region; risk sharing and diversification, better allocation of capital among investment opportunities and financial development. This form of integration anticipated by the treaty establishing the East African Community is to be realized through the formation of a Custom Union, a Common Market, a Monetary Union and ultimately a Political Federation. This academic work shall explore regional integration in the region from the context of capital markets. The body with the responsibility of setting up the legal framework for the integration of capital markets through the enactment of directives is the East African Council of Ministers. The paper shall argue that in as much has the council has enacted a number of directives there are some key areas that have not been legislated on which is hindering the process of integration. It shall conclude by providing recommendations on the directives that should be enacted to smoothen the integration process