The Current State of African Exchanges

The Current State of African Exchanges

This paper reviews the current state of seven African exchanges and their respective market structure. For more than one and a half decades, the liquidity position of African exchanges does not improve that much even though significant progress has been made in terms of infrastructure such as automation. This review uncovers important differences among these African exchanges’ market structures. While some African exchanges employ the internationally accepted market structures, this cannot be said of others. African exchanges wishing to be globally competitive and attaining high liquidity would have to re-visit their market structure design. Additionally, we point out some areas where further research is required. Specifically, we find that there is little, if no previous works that investigate the effect of market structures on African exchanges in terms of liquidity and price discovery. This review is essential for foreign investors who want to understand African exchanges, policy makers in developing policies, academics for further study of African exchange’s market structure, and exchanges that wish to redesign their market.