By Andrei Skvarsky.
According to a study by economists and financial experts, African equity capital markets have generally seen a serious activity decline over the past three years because of debts built up by key African economies and slow growth shown by them.
Last year African capital markets showed some of their meagrest total annual deal volumes on record with 2012 as the only year in which they had done worse than that, the African Development Bank (AfDB) said in a statement.
The AfDB, which is based in Abidjan, Ivory Coast, was citing data presented during a webinar in May that focused on the impact of Covid-19 on African capital markets.
The online event was co-hosted by the Nigerian division of international accounting, audit and advisory firm PricewaterhouseCoopers (PwC) and Making Finance Work for Africa (MFW4A), an AfDB-overseen financial services promotion group.
But simultaneously there have been some upward trends in East Africa, largely owing to domestic investors, according to top securities officials who were on the webinar panel.
The AfDB statement cited Ghanaian Securities and Exchange Commission CEO Daniel Tetteh as saying that trading volumes in Ghana’s stock market for the period between January and April 2020 were nearly three times as large as those for the like period in 2019.
Deals with domestic investors were largely behind this growth, according to Tetteh.
Nairobi Securities Exchange CEO Geoffrey Odundo said that Covid-19 had caused a 20 per cent drop in total trading volumes in East Africa’s capital markets but that domestic investors had been increasingly active in that part of the continent.
It was suggested during the webinar that significant amounts of capital that are said to be tied up in “dead” assets in Africa should be used to support post-Covid recovery.
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