Stock Market Development in Africa: The Critical Macroeconomic Issues

The aim of this research was to analyze the key economic drivers of stock market development in Africa. The study used market capitalization as the explained variable to represent stock market development; credit availed to the private sector, external reserves, foreign direct investment, broad money supply, external trade, GDP per capita, inflation and lending rate to represent macroeconomic factors. Eight African countries were used to represent Africa’s stock markets- Egypt, Nigeria, South Africa, Morocco, Tunisia, Ghana, Kenya, and Mauritius. The study concludes that broad money supply, credit to the private sector, and GDP per capita were the most important variables that drive African stock markets.