VII G. Strengthen Education: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

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References: Stock Market Development in Sub-Saharan Africa - By International Monetary Fund

Increasing public knowledge about the functioning of the stock market could promote the
development of the stock market in Africa. Knowledge about stock market activity can be
improved through regular and intensive education programs. Educating the public about the
role of the stock market can help increase the investor based and improve the liquidity of the
stock market. There is often very little or no education on the role of stock markets in African
economies. Being new financial systems in most of Sub-Saharan Africa, stock markets would
not appeal automatically to economic agents. Education about stock markets must be at the
firm and individual level. At the firm level, it is important to allay the fears of firms by
educating them strongly and regularly on the benefits of listing. Firms in Africa have an array
of reasons why they would not list on stock markets. Apart from the lack of knowledge about
how stock markets work, there are other reasons such as high listing requirements and fear of
losing control over family businesses. A study on the Ghana Stock Exchange (Yartey, 2005)
revealed that 33 percent of firms surveyed were unwilling to list on the stock exchange
because of fear of losing control. At the individual level, African markets could tap into
potentially large amounts of financial wealth which exists outside of the financial system, by
pursuing vigorous and consistent educational campaigns about stock markets at various levels of society. Such educational drives are already in existence in a number of stock
markets in Africa. In South Africa, the JSE/Liberty Life Investment Challenge which
introduces the youth to dynamic games in economics and finance and its application to
investing and trading on the JSE has been running for three decades now.

IMF Working Paper
African Department
Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges
Prepared by Charles Amo Yartey and Charles Komla Adjasi
August 2007

VI. B. Banking Sector Development: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

Introduction: Stock Market Development in Sub-Saharan Africa

VI. A. Macroeconomic Stability: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

Introduction: Human Capital and Economic Development

VI. C. Institutional Quality: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

SMEs and entrepreneurs in Africa

New Partnership for Africa’s Development

VII. A. Automation: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

III. STOCK MARKET DEVELOPMENT IN SUB SAHARAN AFRICA:TRENDS AND CHARACTERISTICS

VII D. Promote Institutional Investors: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

Rebranding Africa

VI. D. Shareholder Protection: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

The concept of development: Africa’s human development

VIII. SUMMARY AND CONCLUSION: Stock Market Development in Sub-Saharan Africa

The role of human and physical capital in growth: The Effects of Human Capital on Economic Development

6.0 The Way Forward: Economic Report on Africa 2007

Wall Street, “Africa is Investing’s Final Frontier”

Conclusion: Human Capital and Economic Development

VII F. Attract Capital Flows and Encourage Foreign Participation: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

4.4 References: Economic Report on Africa 2007

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References: Stock Market Development in Sub-Saharan Africa - By International Monetary Fund

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The IMF is an international organization of 185 member countries. It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment. Since the IMF was established its purposes have remained unchanged but its operations—which involve surveillance, financial assistance, and technical assistance—have developed to meet the changing needs of its member countries in an evolving world economy.
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VII G. Strengthen Education: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

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