That was the recollection of former Treasury Secretary Robert Rubin as he addressed a gathering of African securities analysts and stock exchange executives at a conference inside the New York Stock Exchange, organized by Africa investor.
Former Secretary Rubin’s remarks set the tone for the day. Yes, Africa is open for investment and senior finance executives are doing all they can to increase the confidence levels of international and local investors, streamline regulations and unlock the billions that will transform the continent.
Sunil Benimadhu, CEO of the Stock Exchange of Mauritius and the new president of the African Securities Exchanges Association, laid out the facts.
• Over the last 12 years, the number of stock exchanges on the African continent has increased from 12 to 23.
• Some 2000 companies are listed.
• From 2002 to 2008, before the global economic downturn, most of the exchanges experienced 15 to 40 percent growth each year.
• Since 2008, the African exchanges are the best performing exchanges in the world since they are not directly correlated with other markets.
• From 2007 to 2009, $10 billion has been raised on 18 exchanges through 170 IPOs.
Despite the glowing statistics, Benimadhu and his colleagues described a number of steps that the African stock exchanges must take to ensure continued growth. Beatrice Nkanza, CEO of the Lusaka Stock Exchange, Ekow Afedzie, managing director of the Ghana Stock Exchange, and Emmanuel Ikazaboh, acting CEO of the Nigerian Stock Exchange all called for the same actions.
Individual companies are being urged to list their companies on their local stock exchanges. Many countries are considering reducing their corporate tax rates to provide incentives for companies to list themselves. Listing fees are being reduced; trading hours are being extended; new technologies are being introduced; state-owned enterprises are being privatized; and CEOs are being wooed. Stock splits are making shares more affordable for average investors and the race is on to increase the liquidity on the continent.
Nigeria’s goal is to have 1000 companies listed on the Nigerian Stock Exchange by 2015 and discussions are underway to regionalize the stock exchanges in various sectors of the African continent.
Are there challenges ahead? Of course. Former Treasury Secretary Rubin laid them out. Profitability, he said, will be driven by good citizenship. When businesses help improve conditions for average citizens, they also help create the rule of law, good government, transparency – all prerequisites for economic progress.
The men and women who are writing the regulations and luring investors into Africa’s capital markets seem confident that their value proposition is sound. They’re driving the changes that need to be made to ensure that