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With a current size of $178 trillion, global capital markets are one of the most powerful drivers of economic growth and wealth creation. They allow countries to reduce their reliance on external financing, crowd-in investments for innovation, and promote sustainable growth with greater employment opportunities for a growing population. Moreover, innovations in financial engineering and project financing are helping capital markets play a significant role in closing financing gaps in low-income countries and mobilizing local and foreign savings into key development sectors—such as housing, climate, and infrastructure.

Unfortunately, developing countries have enjoyed only a small portion of the benefits provided by capital markets. Excluding China, only 11 percent of the world’s equity and debt issuance occurred in emerging markets in 2019. In Africa, the impact of capital markets is hardly felt at all.

This is a missed opportunity. The World Bank and IFC launched the Joint Capital Market Program (J-CAP) in 2017 to help developing countries realize the benefits of strong local capital markets. The first-of-its-kind initiative mobilizes experts across the World Bank Group to offer tailor-made advisory services alongside impactful investment solutions to create a systemic impact.

Under J-CAP, the World Bank Group aims to resolve key challenges within a country’s enabling environment, while working hand in hand with local and foreign investors to crowd-in private capital for strategic sectors. In Kenya, for example, J-CAP is working with leading pension funds to establish a capital-market vehicle that will mobilize long-term financing for infrastructure projects.

J-CAP does not work in all countries of the world. The program focuses on six priority countries and one priority sub-region: Morocco, Kenya and the West African Monetary Union (WAMU) in Africa; Peru in Latin America; and Bangladesh, Indonesia and Vietnam in Asia.

Under the J-CAP framework, the World Bank and IFC work with policy makers:

  • to build an enabling environment for healthy capital markets through technical assistance—for example by. modernizing market infrastructure, improving regulatory frameworks, and/or supervisory capacity building.


Under the J-CAP framework, the World Bank and IFC work with investors, asset managers, and issuers:

  • to undertake anchor investments into strategic sectors of the economy;
  • to provide guarantees (IFC, WB, MIGA) to reduce costs and attract private sector participation;
  • to offer local-currency solutions, including bond issuances, derivatives, and structured products.


In WAEMU, JCAP’s goal is to mobilize private investments to finance key economic sectors and make the regional market more attractive to long-term investors. The action plan for WAMU’s capital-markets development, endorsed in December 2018, has four main components:

1Creating an Enabling Environment: The plan includes work on the sovereign debt and the interbank market; international and regional institutional investors’ access to the regional market; investor protection in case of loss of assets; modernizing the tax regime applicable to financial products; and lowering transaction costs.

2Promoting Long-Term Financing: The plan includes work toward structural reforms in regulation to promote new ways of funding infrastructure projects, housing, small and medium enterprises (SME), climate, and social transition with new investment products, such as private equity and real-estate funds, asset-back securities, green bonds, and covered bonds.

3Capacity Building and Knowledge Transfer: The plan supports strengthening market discipline with an appropriate supervisory and sanctions regime.

4 Demonstration Transactions:: IFC’s investments in local-currency transactions demonstrate the benefit of newly developed frameworks, crowd in new investors and issuers, and pave the way for similar transactions. The IFC-Milken fellow program sponsors mid-level government officials to learn more about capital markets development. After one year, over a dozen advisory activities and numerous workshops—held with regional and government agencies and investors—are ongoing to inform and shape the J-CAP’s work. This work is already translating into regulatory changes—for example improvements in information disclosure and the establishment of an investor protection fund.

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