Stock Markets in Africa: Emerging Lions or White Elephants?

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Periodical article

Title:	Stock Markets in Africa: Emerging Lions or White Elephants?
Authors:	Kenny, Charles J. Moss, Todd J.
Year:	1998
Periodical:	World Development
Volume:	26
Issue:	5
Period:	May
Pages:	829-843
Language:	English
Geographic terms:	Subsaharan Africa Africa
Subjects:	financial market Development and Technology Economics and Trade
External link:	https://doi.org/10.1016/S0305-750X(98)00019-9
Abstract:	In a very short time period, Africa has developed an equity market sector. By the end of 1996 there were eleven operating stock markets in sub-Saharan Africa outside South Africa with a total capitalization of over 15.8 billion US dollars. This represents a significant trend toward attracting private capital investment and integration into the global financial marketplace. Using examples taken from experience in other developing regions and Africa's recent past, this paper evaluates the common economic criticisms of stock markets and the political pitfalls involved in their operation. The authors conclude that the positive economic effects of bourses on African economies are far larger than any negative effects. They argue that the political costs can be mitigated while political benefits can also be gained. In conclusion they suggest reforms that can be put in place to reap more benefits from stock markets on the continent and further reduce costs. Bibliogr., notes, sum.