Building a Model for stock exchange growth in Africa: Learnings from the BRICS exchanges

Abstract

Stock exchanges on the African continent need accelerated development in order to attract and utilise capital inflows optimally for development of the continent. The growth of the BRICS capital markets has been notable in the past 10 years. The purpose of this research paper is to take the experiences of the BRICS stock exchanges, both positive and negative, and use them to build a model for the accelerated growth of stock exchanges on the African continent. Exploratory interviews were conducted with the representative BRICS exchanges and the information gleaned was used to construct questionnaires for selected African exchanges, the Africa 5. Inclusion into the Africa 5 was based on the McKinsey “Lions on the Move” model. Findings indicated the importance of an enabling regulatory and policy environment, which had been expected, based on the literature. Unexpected findings included the necessity for there to be courageous and visionary leadership in the capital markets, at regulatory, policy and stock exchange level.