BusinessDay... the voice of business: Nigeria ranks fourth in market capitalisation in sub-Sahara Africa

Nigeria ranks fourth in market capitalisation in sub-Sahara Africa
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KIRK LEIGH on 08 May, 2008 02:00:00
 
Nigeria, the most populous country in Sub Saharan Africa with market
capitalisation of $58 billion or N6.8 trillion in 2007, ranks fourth among the
19 stock exchanges in sub Sahara Africa according to an IFC report.
The report, The Business of Health in Africa, which draws from an earlier
research from Freedomhouse and the Economist Intelligence Unit among others,
puts South Africa on the top spot with capitalisation of $800 billion or N94
trillion.
Following the South African Stock exchange is the Namibian exchange with total
capitalisation of $189 billion or N22.39 trillion. With capitalisation of $98
billion or N11.61 trillion, Botswana has the third most capitalised exchange in
sub Sahara Africa.
The Nigerian Stock Exchange, at N6.8 trillion is two times the size of the
national budget but 13 times less liquid than the South African Bourse, is one
of the fastest growing emerging markets in the world.
Currently, the Nigerian Stock Market has a capitalisation of over $100 billion,
surpassing an earlier prediction of Central Bank governor, Chukwuma Soludo,
boosted by bank stocks. The Nigerian stock market is projected to reach $100
billion capitalisation by end of 2008, up from about $40 billion in 2006.
According to Nex-Rubica Africa top 40 Index, the outperforming stocks in the
last year have been Nigeria financials. “Starting from a relatively low base,
Nigeria alone has the momentum in terms of its population, resources and growth
potentials to catapult it to the first rank of emerging market economies.”
According to Soludo, Nigeria has everything going for it towards becoming an
economic hub in Africa. The governor emphasised that Nigeria’s economic
potential will support the hub as Nigeria comprises 79 percent of ECOWAS Gross
Domestic Product and is the world’s sixth in gas reserves. According to the
governor, Nigeria’s Foreign Direct Investment  position is one of the highest
returns on investment in real dollar terms.
His words: “It has sustained macroeconomic stability, including stable
exchange rate and appreciating local currency, backed by the highest level of
reserves in Africa (about $42 billion).