SPEECH DELIVERED BY THE CHIEF EXECUTIVE OFFICER, CAPITAL MARKETS AUTHORITY, MRS STELLA KILONZO - MBS , DURING THE OFFICIAL OPENING OF THE FOURTH ANNUAL UNIVERSITY OF NAIROBI OPEN DAY AT TAIFA HALL ON APRIL 13, 2012.
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· Chancellor of the University of Nairobi, Dr. Joseph Wanjui
· Chairman, University of Nairobi Council, Mr. John Simba
· The Vice-Chancellor, Prof. G.A.O. Magoha
· Deputy Vice-Chancellors
· Principals of Colleges
· Deans and Directors
· Members of Staff
· Students
· Parents
· Distinguished guests
It gives me great pleasure to preside over the University of Nairobi Fourth Open Day. I wish to congratulate you for the excellent achievement in the performance contracting ranking and I urge you to improve on these excellent results.
Ladies and gentlemen, I also wish to recognize the effort that the University of Nairobi has put in place to facilitate access to higher education by many Kenyans. I note that the University has an offering of over 400 programmes that can help the country address its development challenges and realize the goals of the Kenya Vision 2030. Your endeavor to offer quality and accessible higher education to Kenyans, including the greater continent and world at large, is indeed a testament to your mission to providing education that embodies the aspirations of Kenyans.
Ladies and gentlemen, in mentioning the aspiration of Kenyans, one cannot neglect to speak about Vision 2030, Kenya’s economic development blueprint covering the period 2008 to 2030 which aims to transform Kenya into a newly industrializing, “middle-income country providing a high quality life to all its citizens by the year 2030”.
The Vision is based on three “pillars”: the Economic, the Social and Political pillars. The Economic Pillar identifies six priority sectors to drive growth towards realizing its key objective. These are Tourism, Agriculture, Wholesale and Retail Trade, Manufacturing, Business Process Outsourcing (BPO) and Financial services. The Financial Sector’s main objective under Vision 2030 is to create a vibrant and globally competitive financial sector that will create jobs and promote high levels of savings to finance Kenya’s overall investment needs and make Kenya the regional financial services hub.
Distinguished guests, being the CEO of the Capital Markets Authority, I must seek your indulgence to digress from the theme of the day so as to speak a little bit of who we are and what we do. The Capital Markets Authority (CMA) is a statutory agency charged with the responsibility of regulating the development of an orderly, fair and efficient capital market in Kenya. It licenses and supervises market intermediaries, develops regulations for the market, conducts on-site and off-site market surveillance and enforces compliance, promotes market integrity and plays a critical role in deepening the capital market.
Within the Vision 2030 context, the Capital Markets sector, as a key driver for long-term resource mobilization, is expected to play a central role in mobilizing the savings and investments required to implement various projects and programmes with the overall goal of contributing to increased and sustained economic growth that will anchor the socio-economic well being of Kenyans.
Consequently, the Authority continues to implement and spearhead several initiatives, which will enhance the deepening of Kenya’s capital markets and offer various employment and wealth creation opportunities for Kenyan’s, including the youth.
In this regard, the securities markets trading infrastructure has been automated entirely. In addition, we have put in place appropriate structural arrangements for an OTC market for bonds. We are now focused on automating the entire supply chain by implementing the Broker Back Office System to enhance efficiency within the market microstructure and effectively mitigate potential risks to investors.
The Authority is also spearheading the demutualization process of the Nairobi Securities exchange to enhance its corporate governance structures while also implementing a Risk Based Supervision approach to its market supervision function.
In cognizance of the fact that Investor protection is at the core of its mandate and that there was a steady upsurge in fraud related cases on investors and market players in the recent past, the Authority established a Capital Markets Fraud Investigation Unit (CMFIU), in 2009.
Other successful initiatives we have successfully implemented include the rolling out of a comprehensive and targeted Public Investor Education Campaign throughout the country as well as the establishment of a complaints center within the Authority in a bid to resolve all the general market complaints lodged by investors and to work with NSE in resolving transaction based individual complaints.
In the near future, we expect to introduce a Futures Exchange and start approving Real Estate Investment Trusts (REITS), once the framework is in place.
The establishment of a Futures Exchange will benefit all sectors of the economy by addressing the current volatility of prices of agricultural commodities that would be traded in the Futures Exchange. This will also elevate the Kenyan economy to a global economy by facilitating futures trading of multi-asset classes including currency, mineral, and energy derivatives.
For REITS, the proposal is for a dual regulatory framework that provides for traditional and development REITS. The traditional REITS, which pool funds for investment in stable income generating rental properties, would be open to investment by the general public given that the income streams will be predictable much like fixed income securities such as bonds.
The development REITS pool funding for construction of housing and other priority sector construction projects which would be permitted to invest in higher risk development and construction activities. Upon completion of construction the properties, would be eligible to be rolled into a traditional REIT once they establish a stable rental income flows.
We also expect the Growth Enterprise Market Segment (GEMS), which will be a listing platform for Small and Medium Enterprises to be in place this year. This is expected to give SME’s an opportunity to raise capital, an exit mechanism for investors, and facilitate price discovery. We anticipate this will spur new listings at the Nairobi Securities Exchange and help investors diversify their portfolios.
The innovations are in line with the Vision 2030 objectives of providing housing in Kenya, where we face huge supply constraints, and catalyze additional economic activities through the SME sector, which contributes about 40 percent of Kenya’s GDP.
We also anticipate Parliament to pass the proposed Capital Markets Bill and the Securities & Investments Bill. This is expected to bring Kenya’s capital markets legal and regulatory framework in line with global best practice.
Ladies and gentlemen, this open day provides an opportunity for the University to interact with prospective students, parents the public and corporate organizations represented here today. As a professional, I appreciate the advantages of this method including face to face interaction, immediate feedback on your services and products, and the ability to publicize yourselves.
Away from showcasing your products, open day enables the public to learn more about the institution, which is particularly important in this era of cut throat competition from other local and international educational institutions.
Ladies and gentlemen, over the last seven years, the University of Nairobi has witnessed a radical change in its operations. A new culture of reforms has been infused in the management of the institution with a focus on quality standards, performance evaluation, stakeholder participation in governance and management and rebranding of products. Given these milestones in your development, you are now more open to probing by the public and thus it is worthwhile to engage stakeholders’ forums such as this one to assure them of the strength of your brand.
Ladies and gentlemen, I’m passionate about investing in higher education as I believe that the success of a country’s economic productivity and growth is directly correlated to its educated population.
In this regard, the Capital Markets Authority is committed to pursuing collaborative partnerships with the University of Nairobi, and in particular, the School of Business to explore research and training opportunities as well as develop mentoring (internship) programs that will enable students to acquire hands on experience in the capital markets.
At this juncture, it would suffice to note that as part of the regional integration initiatives under the East African Community, the Authority in conjunction with other regulators under the East African Securities Regulatory Authorities is undertaking a project with the objective of strengthening the knowledge, skills and capabilities of issuers, investors and intermediaries. The process is expected to culminate into certification of individual market participants dealing with the public either through trading or giving advice to investors, especially those who could be considered to be unsophisticated in regard to the securities market. The institutional framework and the curriculum for the programme have been developed and a quality control body of eminent persons has also been put in place which will be charged with the overall administration and supervision of the programme including review of the curriculum. This could be a potential area for further engagement with the University of Nairobi.
Other areas of potential collaboration could include the development of education bonds to finance infrastructure as well as provide funding for sponsorship programs.
In closing, I wish to sincerely appreciate the Council and Management of the University for the Opportunity to preside over this Open Day and I look forward to more engagements in the future. It is always my pleasure to interact with the youth as they are bustling with ideas and talent of which need to be harnessed appropriately
With those few remarks, it is now my pleasure to declare the University of Nairobi Open Day officially opened.
Thank You
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