Africa's stock exchanges plan to raise capital for businesses

One of the critical challenges facing African securities exchanges is the issue of critical mass. Many African exchanges are not very big or liquid and lack a sufficient number of listed companies. This poses a challenge in mobilizing capital for African businesses and driving the continent's economies onto the global economic stage. The 20th annual conference of the African securities exchanges in Rwanda aims to address this issue and find ways to make African exchanges more effective in mobilizing capital. The Johannesburg Stock Exchange (JSE), with close to 400 listed companies and 128 years of history, is seen as a role model for other African exchanges. Countries like Nigeria have made progress in encouraging more companies to list through regulatory reforms and a more enabling environment. However, a significant number of African companies, often family-owned, do not see the need to list on exchanges as they may not require external capital. To address the need for capital among newer companies and startups, African exchanges are exploring alternative markets like SME exchanges and bond markets. Countries like Nigeria and Kenya have introduced SME exchanges to attract new companies and stimulate economic growth. Additionally, the introduction of equity derivatives markets is being considered as a new product development strategy to attract investment. The issue of governance and transparency is also a key focus for African exchanges. Countries like Nigeria, Kenya, Egypt, and Morocco are making efforts to enhance governance standards and improve credibility. Initiatives like the King code in South Africa and COP 16 in Morocco are helping exchanges strengthen their governance frameworks. The African securities exchanges association is also working on improving information availability and developing technical linkages between exchanges to facilitate easier investment across markets. The goal is to create a more interconnected and investor-friendly environment that will attract more capital and drive economic growth across the continent. Despite the challenges, African exchanges are optimistic about the future and are committed to collaboration and knowledge-sharing to enhance their competitiveness. The potential for growth and development in African markets is significant, and with the right strategies in place, African exchanges can play a more significant role in mobilizing capital for businesses and driving economic prosperity on the continent.