By Business Insider Reporter
The African Development Fund (ADF), the concessional financing arm of the African Development Bank Group, has approved a $9 million grant to support a major regional initiative designed to deepen financial integration across East and the Horn of Africa.
The funding will support the East Africa and Horn of Africa Capital Markets and Payment Systems Integration Project (EAC-CAMPSI), a strategic programme expected to accelerate cross-border investments, modernize financial infrastructure and expand access to long-term capital across nine countries: Tanzania, Kenya, Uganda, Rwanda, Burundi, the Democratic Republic of Congo, Ethiopia, Somalia and South Sudan.
The project will be implemented by the East African Community (EAC) Secretariat and forms part of broader efforts to build a more interconnected regional economy capable of attracting investment, supporting trade and improving financial inclusion.
The initiative comes at a time when East Africa is among Africa’s fastest-growing economic regions, yet financial markets remain fragmented. While trade integration has advanced through the East African Community and the African Continental Free Trade Area (AfCFTA), capital and financial services continue to face significant cross-border barriers, limiting investment flows and increasing transaction costs for businesses.
According to development finance experts, strengthening regional financial infrastructure is becoming increasingly important as governments seek to mobilize domestic capital to fund industrialization, infrastructure development and private-sector growth.
“The future of East Africa’s economy will depend not only on the movement of goods and services, but also on the seamless movement of capital,” said EAC Secretary General Stephen Patrick Mbundi.
“This project represents an important step toward a more integrated regional financial system that can mobilise investment, deepen financial markets and create new opportunities for businesses and citizens across our region.”
Building regional capital markets
A key objective of the project is to improve the efficiency and connectivity of capital markets across participating countries. Despite rapid economic growth, many East African economies continue to rely heavily on bank financing, while capital markets remain relatively shallow and underdeveloped.
By harmonizing market infrastructure, regulations and payment systems, the initiative aims to make it easier for investors to participate in regional financial markets, improve liquidity and broaden access to financing for businesses.
For Tanzania, the initiative could support ongoing efforts to deepen the domestic capital market and increase participation in the Dar es Salaam Stock Exchange. Greater regional integration could also provide Tanzanian companies with access to a larger pool of investors and financing opportunities beyond national borders.
The project is expected to strengthen securities trading platforms, facilitate cross-border settlement systems and improve interoperability between payment networks, reducing the time and cost associated with regional financial transactions.
Supporting AfCFTA ambitions
The programme aligns closely with the objectives of the African Continental Free Trade Area, which seeks to create a single African market for goods and services.
While much attention has focused on reducing tariffs and improving trade logistics, economists increasingly argue that financial integration is equally critical to the success of AfCFTA. Businesses cannot fully exploit regional trade opportunities without efficient payment systems, access to financing and integrated capital markets.
The project also supports the implementation of the EAC Cross-Border Masterplan 2025–2030, which identifies financial integration as a cornerstone of regional economic transformation.
Ahmed Attout, Director for Financial Sector Development at the African Development Bank Group, described integrated financial markets as essential to Africa’s long-term growth.
“Integrated financial markets are critical to Africa’s economic transformation,” he said. “This project will help strengthen both the infrastructure and regulatory foundations needed to mobilise domestic capital, deepen regional markets and support greater economic resilience.”
Opportunities for business and investors
Beyond institutional reforms, the project is expected to generate tangible benefits for businesses, investors and consumers. Improved payment systems could lower transaction costs for companies operating across borders, while more efficient capital markets could increase access to funding for small and medium-sized enterprises.
The initiative also places emphasis on expanding participation by women and young entrepreneurs in regional financial markets, helping address longstanding barriers to financial inclusion.
For East Africa’s private sector, the project signals a shift toward a more integrated financial ecosystem where capital can move more freely across borders, supporting investment, innovation and economic growth.
As governments across the region grapple with rising development financing needs and increasing pressure on public budgets, deeper regional financial markets could provide an important source of long-term capital. The approval of the $9 million grant marks another step in East Africa’s journey toward economic integration, highlighting growing recognition that the region’s next phase of growth will depend not only on physical infrastructure and trade corridors, but also on modern, interconnected financial systems capable of supporting a rapidly expanding economy.
