East Africa capital markets project still in dispute

Kenya’s participation in a mega regional capital markets infrastructure project hangs in the balance as the East African Community Secretariat hesitates to rule on a flawed procurement process.

About six months ago, Kenya pulled out of a World Bank-funded capital markets integration project meant to make trading in shares across East Africa cheaper and faster, citing irregularities in tendering for the procurement of a $3.8 million software package.

READ: Kenya pulls out of EA capital markets project over tender

Thereafter, Kenya petitioned the EAC Secretariat to review the entire procurement process, cancel the tender and invite fresh bids.

Geoffrey Odundo, the CEO of the Nairobi Securities Exchange said they were yet to receive any response from the EAC Secretariat over the matter.

“The other regional partners are still working with the vendor to see if the software will work,” said Mr Odundo.

He said that Kenyan capital markets regulators raised concerns over the quality of the software procured and whether it would be compatible with the NSE’s clearing and settlement system. They also queried the capacity of the vendor to deliver on the project.

The tender was allegedly awarded to Infotech, a Pakistan-based software firm, based on terms of reference that had not been approved by the region’s Sectoral Council of Finance and Economic Affairs.

Last week, the East African Securities Exchange Association (EASEA) said the project is underway and that Kenya would be joining up once its concerns are addressed.

Pierre Celestin Rwabukumba, the chairman of EASEA and chief executive of the Rwanda Securities Exchange (RSE)  said the process of training end users of the software is underway in Uganda, Tanzania and Rwanda.

End users of the software include stockbrokers and other market players.  Mr Rwabukamba said the project is expected to be completed in the first quarter of next year.