Companies Traded on Africa’s Stock Exchanges
The interactive map is available at map.isoko-institute.org
A mature financial sector is crucial to any modern economy. Financial systems provide capital to entrepreneurs, encourage individual savings, minimize risk and increase liquidity. Stock markets in particular support economic growth by improving domestic savings and increasing both the quality and quantity of foreign and domestic investment. Moreover, companies can raise capital at a lower cost without having to rely on financing from a bank.
Today sub-Saharan Africa has 15 active stock exchanges. In 1989 there were only five. Some of these exchanges are still in their infancy; nevertheless, the proliferation of stock exchanges and the growing number of companies being traded on them is a bellwether of progress being made on the continent. As investors from Brazil, China, the Middle East and increasingly the West consider the sub-Sahara as part of their portfolio, African countries have risen to the challenge by developing more sophisticated financial systems to accommodate investments.
Sub-Saharan Africa’s exchanges are comprised of 22 countries and feature some of the world’s top performing exchanges, including Kenya, Tanzania and Botswana. The Johannesburg Stock Exchange is sub-Saharan Africa’s largest and one of the world’s 20 biggest exchanges. And yet like Africa’s countries, the size and performance of the exchanges varies considerably. Rwanda’s stock exchange, still in its infancy, trades only five companies.
As Africa continues to push forward, many hope that its image of old will be cast aside. According to Ernst & Young’s Africa Attractiveness Survey the “time for Africa is now” but “we need to bridge this perception gap by telling new stories about Africa, stories of economic growth and opportunity.” This map is an attempt to help close that perception gap.
It’s apparent that most of the 1025 companies traded on Africa’s stock exchanges are clustered in South Africa, and West Africa. Still, the map displays that there are other companies located in Canada, Europe, Australia and the Arabian Peninsula.
Despite the repeating narrative that most of the continent’s economic activity centers around primary resource commodities, the three maps above show a different narrative. As can be seen, financials and consumer goods are sectors that are more widely traded than basic materials.
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