Unlock investment potential

While still in its developing stage, the African financial market is significantly contributing to the continent’s capacity to finance key sectors such as small enterprises, housing, infrastructure and agriculture.

This market, made up of over 30 securities exchanges and a total value of over $1.5 trillion, could do more for the development of the continent. 

But, to achieve this, we must be ready to answer some of the most pressing questions: How can we improve the current market infrastructure to increase liquidity and enhance investors’ confidence? How can we enhance the regulatory, supervisory, and risk monitoring systems to increase transparency? And what are some ways we can boost capital-raising initiatives on securities exchanges like rights issues and initial public offerings (IPOs)?

The senior management of listed companies needs to strategically plan for regular meetings with both investors and analysts to build relationships. This will give investors and analysts deeper insights into their operations and strategic direction. 

Stringent regulatory frameworks

To mitigate the transparency issues, regulators should impose tighter measures, obligating listed companies to make pertinent issues, such as key dates, well-known to investors and analysts in good time.

With over 40 per cent of State-owned firms in sub-Saharan Africa unprofitable, governments should consider privatisation. However, the efficiency of this approach is tied to stringent regulatory frameworks, better market conditions and strategic planning.

African financial markets should also consider leveraging data analytics and machine learning to help aggregate, analyse and standardise data from different sources.

Lastly, these countries should consider issuing Eurobonds that would not only act as a benchmark for the corporate bond market but also an opportunity for them to refinance existing debt at potentially lower interest rates. 

Mukami is an investor and public relations consultant