African Capital Markets: Challenges and Opportunities



Heidi Raubenheimer, CFA
Senior Director, Journal Publications

Where are you going? 

Where are you coming from?...

Ub’ ubiziwe yiAfrika1 then we're singing the same song. 

So goes the refrain of one of my favourite songs from home: Freshlyground’s “Mowbray Kaap.”

Every piece in this CFA Institute Research Foundation brief tells of a market in Africa: where it’s going and where it’s coming from. It was my privilege to edit this first Africa-focused publication by CFA Institute: a collaboration of essays from authors across my home continent. I hope that they “sing the same song” and stimulate and engage investment industry stakeholders, including CFA Institute members and societies, firms, universities, regulators, exchanges, trade associations, and other capital market stakeholders in Africa.
What you’ll read here was developed in conjunction with the African Securities Exchanges Association (ASEA) and builds on the memorandum of understanding between CFA Institute and ASEA. CFA Institute has partnered with CFA Institute local societies in South Africa, Nigeria, Mauritius, and Ghana, as well as our emerging pre-society in Zimbabwe, to identify authors and present a collection of pieces by local contributors on their respective markets. In addition, ASEA has collaborated with local authors in Morocco, Egypt, Botswana, and East Africa to contribute to the brief. And so this brief reflects our desire to partner with strong African entities and our own local societies to provide authoritative insights and analysis for current or prospective investors in African capital markets.
Some of the exchanges you’ll read about here were established in early colonial times. South Africa led the way on the heels of the diamond and gold rush, followed by Zimbabwe, Egypt, and Namibia (a German colony at the time)—all before 1905. Some of these didn’t outlive the commodities rush (Kimberley and Cape Town in South Africa; Namibia) but others are still thriving today, substantially diversified and modernised from their beginnings a century ago. Some capital markets on the continent were established more recently, and their development tells of independence and nation building: Nigeria in the 1960s; Botswana, Mauritius, and Ghana in 1989; Namibia (post independence from South Africa in the 1990s). Still others, particularly the East African exchanges, are brand new and leapfrogging toward greater participation. All of these tell of how regulation, trading technology, and fintech are enabling fairer, faster, and lower-cost participation in finance and investment for more market participants.
These tales of African capital markets’ history and future reflect the journey of CFA Institute: from a lunch group in New York City in 1937 to a diverse collection of 170,000 members and 157 societies worldwide in 2019, united with the purpose of leading the investment profession globally for the ultimate benefit of society. I hope that each of these pieces will tell you a story that you didn’t entirely anticipate, from origin to modern day and the many ambitions for the future.
1Translated from Xhosa: “If you’ve been called by Africa, then we’re singing the same song.”