Expanding on the general overview of the financial sector in Africa, this second article focuses on the development of the capital markets and the recent initiatives to attract long-term capital to the continent. Capital markets in Africa are still in their infancy and mirror the economic development of the continent. However, the evolution over the last decade prior to COVID-19 pandemic underscores the growth potential. The number of stock exchanges have grown from seven in the 1980s to 30 in 2020. The evolution of financial markets mirrors the economic development of the region. The market capitalisation of the JSE (Johannesburg Stock Exchange ) alone accounts for more than 80% of the entire ASMs, while the rest of the stock exchanges are characterized by low market capitalisation, few domestic companies, small size of listed firms and low levels of liquidity with few shares mostly dominating total trading activity. The biggest ones are at a very advanced stage of interconnection that has increased liquidity and product diversification. The article profiles the ongoing efforts towards improving the available long-term financial resources with institutional investors.
Expanding on the general overview of the financial sector in Africa, this second article focuses on the development of the capital markets and the recent initiatives to attract long-term capital to the continent. Capital markets in Africa are still in their infancy and mirror the economic development of the continent. However, the evolution over the last decade prior to COVID-19 pandemic underscores the growth potential.
