Business
African stock exchanges exhibit rapid growth
Traders on the floor of the Nigerian Stock exchange. PHOTO/File
Stock markets in Africa have been making steady progress recently over the past decade despite the storms of the global financial crisis. In August, the South African stock exchange reached an all-time high due to record levels of investor optimism. Resource-based companies performed especially well, as did gold and platinum mines.
Other African countries have also been experiencing very positive growth when it comes to their stock markets over the last year. Although the Nigerian bourse has had its ups and downs in recent years, on 14th August its year-to-date (YTD) growth had reached 11.55 percent. In Ghana on 22nd August, the YTD performance growth reached nearly 6 percent. For Kenya the YTD performance on the same day was almost 20 percent. One-year growth was also positive, at almost 9 percent.
African stock exchanges are also some of the best performing on the planet. They have consistently been ranked in the top 10 bourses since 1996. In 2011, the Botswana Gabarone Index earned its place as the seventh best performing stock exchange in the world, up 8.8 percent. The Tanzania Stock Exchange came sixth, having risen by 12 percent.
Moreover, stock exchanges in Africa are spreading. Before 1989, there were only five stock exchanges across the whole of sub-Saharan Africa. Now there are 29 exchanges covering the capital markets of 38 nations, ranging from Benin to Botswana.
Stock market development could well be a means to help African countries overcome the current growth impasse caused by the global financial crisis. Indeed, developed and healthy stock markets could be a key ingredient in promoting high and sustainable private sector-led growth.