An overview on the African Stock Exchange

It is no secret that the African continent is the most under developed in the world. In spite of this fact, significant economical growth has taken place. Since 2001, the continental annual economic growth was more than 5% on average. Although these statistics are encouraging, plenty still needs to be done to do away with prolonged issues such as unemployment, poverty and the stunted fiscal development on the African continent.

In order to maintain the present fiscal development and to provide confidence in foreign as well as domestic investment, a serious effort is needed to progress, increase, and bring the financial markets of Africa up to date.

From the early 1990’s, substantial development has been made in the African securities markets. Before 1990, there were only eight stock markets on the whole of the African continent of which five were in Sub Saharan African and three in Northern Africa. Currently the number has risen to 22.

During 2005 the market capitalization for the whole of Africa was a mere $569 Billion. At the fourth quarter of 2007 the market capitalization of the largest stock exchange on the continent, the South African Stock Exchange, JSE, expanded to a remarkable $886 billion. The Egyptian Stock Exchange that is the second largest in Africa showed a market capitalization of $150 billion at the beginning of 2008 and the third largest stock exchange, Nigerian Stock Exchange at $82 billion at the last quarter of 2007. At the beginning of 2008 these three largest stock exchanges had an impressive combined market capitalization of more than $1.118 trillion. At present these three stock exchanges account for in excess of 90% of the market capitalization in Africa.

During 2005 the total number of stock exchange listed companies on the African continent counted to about 1790. This figure grew to more than 2000 listed companies in 2008. Currently, more than half of the 54 African countries have established securities exchanges.