Stock Market Development Determinants in Africa: A Review of Literature

Wellington Garikai Bonga; Peterson Kitakogelu Ozili; Ireen Choga

doi:doi:10.11648/j.ijefm.20251302.12

Research Article |

| Peer-Reviewed

Stock Market Development Determinants in Africa: A Review of Literature

Wellington Garikai Bonga^*

, Peterson Kitakogelu Ozili

, Ireen Choga

Published in International Journal of Economics, Finance and Management Sciences (Volume 13, Issue 2)

Received: 23 March 2025 Accepted: 3 April 2025 Published: 29 April 2025

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

The development of stock markets is crucial for economic growth, capital formation, and financial stability, particularly in Africa, where economies are often characterised by volatility and underdevelopment. Results of this paper are drawn from a systematic literature review which synthesizes findings from twenty-nine newly published research papers published in peer-reviewed journals between 01 January 2020 and 31 December 2024, obtained freely on Google Scholar. The main objective of this paper is to identify the determinants of stock market development across different African countries. From the twenty-nine reviewed papers, it can be noted that the key determinants include macroeconomic indicators such as economic growth, inflation, interest rates, trade openness, and foreign investment. The review of literature highlighted the mixed effects of these factors, indicating that their influence can vary significantly across countries and regions. Stakeholders, such as policymakers, investors, and financial institutions, have shown increasing interest in understanding these dynamics due to the potential for stock markets to enhance capital mobilization and economic resilience. The review of literature also identified contested areas in the literature, suggesting that while some determinants are widely acknowledged, others remain debated. Future research directions include exploring the impact of technological advancements, regulatory frameworks, and socio-political factors. This paper underscores the need for a nuanced understanding of stock market dynamics to inform effective policy interventions aimed at fostering sustainable economic growth in Africa.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 13, Issue 2)
DOI	10.11648/j.ijefm.20251302.12
Page(s)	61-69
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

Africa, Capital Formation, Determinants, Stock Market Development, Stock Markets, Systematic Literature Review

References

[1]	Adoms, F. U., Yua, H., Okaro, C. S., & Ogbonna, K. S. (2020). Capital Market and Economic Development: A Comparative Study of Three Sub-Saharan African Emerging Economies. American Journal of Industrial and Business Management, 10(5): 963-987. https://doi.org/10.4236/ajibm.2020.105065
[2]	Afonso, A., & Reimers, M. (2022). Does the introduction of stock exchange markets boost economic growth in African countries? Journal of Comparative Economics, 50: 627-640. https://doi.org/10.1016/j.jce.2022.01.006
[3]	Akash, C., Prashant, D., & Mohammed, H. N. (2023). Macroeconomic Determinants of Stock Market Development: A Systematic Literature Review. Jurnal Multidisiplin Madani, 3(8): 1800–1807. https://doi.org/10.55927/mudima.v3i8.3667
[4]	Asravor, R. K., & Fonu, P. D-D. (2021). Dynamic relation between macroeconomic variable, stock market returns and stock market development in Ghana. International Journal of Finance & Economics, 26(2): 2637-2646. https://doi.org/10.1002/ijfe.1925
[5]	Atuna, L. M., & Adusei, M. (2022). Key determinants of cross-listing in Sub-Saharan Africa. Transnational Corporations Review, 14(1): 62-76. https://doi.org/10.1080/19186444.2020.1866920
[6]	Ayadi, O. F., & Williams, J. (2023). Stock market development and capital formation in selected African economies. Journal of Money and Business, 3(2): 125-136. https://doi.org/10.1108/JMB-05-2022-0023
[7]	Becker, C. (2024). Attractiveness of African stock markets for foreign investors: An analytical perspective. Journal of Securities Operations & Custody, 16(4): 385-395. https://doi.org/10.69554/nxfz4587
[8]	Bonga, W. G., Chimwai, L., & Choga, I. (2022). Investigating Stock Market Liquidity: Evidence from Zimbabwe Stock Exchange. DRJ Journal of Economics and Finance, 7(2): 36 – 45. Available at SSRN: https://ssrn.com/abstract=4310296
[9]	Chowdhury, R. S., Khraiche, M., & Boudreau, J. W. (2022). Corruption and Stock Market Development: Developing vs. Developed Economies. Kennesaw.
[10]	Dave, H., & Akongwale, S. (2024). Understanding the determinants of the development of the green bond market in South Africa. South African Journal of Business Management, 55(1): a4065. https://doi.org/10.4102/sajbm.v55i1.4065
[11]	Fagbemi, F., & Ajibike, J. O. (2022). West African Emerging Economies: Comparative Insights on Ghana’s and Nigeria’s Stock Market Development. American Journal of Economics and Business Administration, Science Publications, 14(1): 55-67. https://doi.org/10.3844/ajebasp.2022.55.67
[12]	Igwilo, J. I., & Sibindi, A. B. (2021). ICT Adoption and Stock Market Development in Africa: An Application of the Panel ARDL Bounds Testing Procedure. Journal of Risk and Financial Management, 14(12): 601. https://doi.org/10.3390/jrfm14120601
[13]	Imhanzenobe, J. O. (2023). Historical Development of Frontier Stock Markets in Sub-Saharan Africa. International Journal of Professional Business Review, 8(7): e02659. https://doi.org/10.26668/businessreview/2023.v8i7.2659
[14]	Michael, A., Effah, N., Joel, T., & Nkwantabisa, A. (2021) Stock Market Development, Financial Deepening and Economic Growth in Africa. Journal of Financial Risk Management, 10: 1-24. https://doi.org/10.4236/jfrm.2021.101001
[15]	Mlambo, C. (2022). The impact of international portfolio investment on economic growth: the case of selected African states. International Journal of Research in Business and Social Science, 11(10): 151–159. https://doi.org/10.20525/ijrbs.v11i10.2240
[16]	Molefhi, K. (2021). The Impact of Macroeconomic Variables on Capital Market Development in Botswana’s Economy. African Journal of Economic Review, IX(II): 204-222.
[17]	Njenga, G., Machagua, J., & Gachanja, S. (2022). Capital markets in sub-Saharan Africa. WIDER, Working Paper 2022/112.
[18]	Nkwede, F. E. (2020). Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian. International Journal of Development and Management Review, 15(1): 178-194.
[19]	Nyakurukwa, K., & Seetharam, Y. (2022). Stock market integration in Africa: Further evidence from an information-theoretic framework. International Finance, 26(1): 2-18. https://doi.org/10.1111/infi.12419
[20]	Ongo, N. B. E., Mamadou, A. T., Atangana, Z. C. C., & Djam'Angai, L. (2024). What drives financial market growth in Africa? International Review of Financial Analysis, 91. https://doi.org/10.1016/j.irfa.2023.102990
[21]	Próchniak, J., Płoska, R., Zamojska, A., Lepczyński, B., & Cirella, G. T. (2023). Maturity Analysis of Stock Exchanges in Africa: Prepandemic Sustainability Perspective. Sustainability, 15(8): 6820. https://doi.org/10.3390/su15086820
[22]	Shamalime, J. M., & Yohane, R. (2024). Breaking Through Limits: Exploring Factors Hampering Growth in Zambia’s Capital Markets-Lusaka Securities Exchange Perspective. International Journal of Learning and Development, 14(2): 72-89. https://doi.org/10.5296/ijld.v14i2.22016
[23]	Soumaré, I., Kanga, D., Tyson, J., & Raga, S. (2021). Capital market development in sub-Saharan Africa: Progress, challenges and innovations. ODI, Working Paper 2, A joint FSD Africa–ODI research programme for financial sector development in Africa. London: ODI.
[24]	Sulaiman, L. A., Adejayan, A. O., & Ilori, O. O. (2023). Capital Market Development and Economic Growth of West African Countries. Nigerian Journal of Banking and Financial Issues (NJBFI), 9(1): 115-125.
[25]	Temile, S. O., Owoeye, A. B., & Jatmiko, D. P. (2022). An Empirical Analysis of the Stock Market and Economic Growth Nexus in Nigeria and South Africa. International Journal of Economics, Commerce and Management, X(10): 271-290.
[26]	Tiamiyu, K. A., Odugbemi, T. H., & Adelaja, A. O. (2022). Financial Deepening and Stock Market Development in Nigeria: Evidence from Recent Data (1981-2019). Acta Universitatis Danubius Œconomica, 18(2): 159-174.
[27]	Tumwebaze, Z., Orobia, L., Bananuka, J., Tirisa, C. B., & Balunywa, A. (2022). Stock market participation in less developed countries: a perception-based evidence from Uganda. Cogent Business & Management, 9(1): 2122161, https://doi.org/10.1080/23311975.2022.2122161
[28]	Uchendu, S. (2023). Effect of Selected Financial Instruments on Capital Market Development in Nigeria. AFIT Journal of Marketing Research, 3(1): 14-27.
[29]	Uhunmwangho, M. (2022). Determinants of Stock Market Volatility in Africa. African Journal of Economic Review, 10(2): 136-151.

Cite This Article

Plain Text BibTeX RIS

APA Style

Bonga, W. G., Ozili, P. K., Choga, I. (2025). Stock Market Development Determinants in Africa: A Review of Literature. International Journal of Economics, Finance and Management Sciences, 13(2), 61-69. https://doi.org/10.11648/j.ijefm.20251302.12

Copy | Download

ACS Style

Bonga, W. G.; Ozili, P. K.; Choga, I. Stock Market Development Determinants in Africa: A Review of Literature. Int. J. Econ. Finance Manag. Sci. 2025, 13(2), 61-69. doi: 10.11648/j.ijefm.20251302.12

Copy | Download

AMA Style

Bonga WG, Ozili PK, Choga I. Stock Market Development Determinants in Africa: A Review of Literature. Int J Econ Finance Manag Sci. 2025;13(2):61-69. doi: 10.11648/j.ijefm.20251302.12

Copy | Download

@article{10.11648/j.ijefm.20251302.12,
  author = {Wellington Garikai Bonga and Peterson Kitakogelu Ozili and Ireen Choga},
  title = {Stock Market Development Determinants in Africa: A Review of Literature
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {13},
  number = {2},
  pages = {61-69},
  doi = {10.11648/j.ijefm.20251302.12},
  url = {https://doi.org/10.11648/j.ijefm.20251302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20251302.12},
  abstract = {The development of stock markets is crucial for economic growth, capital formation, and financial stability, particularly in Africa, where economies are often characterised by volatility and underdevelopment. Results of this paper are drawn from a systematic literature review which synthesizes findings from twenty-nine newly published research papers published in peer-reviewed journals between 01 January 2020 and 31 December 2024, obtained freely on Google Scholar. The main objective of this paper is to identify the determinants of stock market development across different African countries. From the twenty-nine reviewed papers, it can be noted that the key determinants include macroeconomic indicators such as economic growth, inflation, interest rates, trade openness, and foreign investment. The review of literature highlighted the mixed effects of these factors, indicating that their influence can vary significantly across countries and regions. Stakeholders, such as policymakers, investors, and financial institutions, have shown increasing interest in understanding these dynamics due to the potential for stock markets to enhance capital mobilization and economic resilience. The review of literature also identified contested areas in the literature, suggesting that while some determinants are widely acknowledged, others remain debated. Future research directions include exploring the impact of technological advancements, regulatory frameworks, and socio-political factors. This paper underscores the need for a nuanced understanding of stock market dynamics to inform effective policy interventions aimed at fostering sustainable economic growth in Africa.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - Stock Market Development Determinants in Africa: A Review of Literature

AU  - Wellington Garikai Bonga
AU  - Peterson Kitakogelu Ozili
AU  - Ireen Choga
Y1  - 2025/04/29
PY  - 2025
N1  - https://doi.org/10.11648/j.ijefm.20251302.12
DO  - 10.11648/j.ijefm.20251302.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 61
EP  - 69
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20251302.12
AB  - The development of stock markets is crucial for economic growth, capital formation, and financial stability, particularly in Africa, where economies are often characterised by volatility and underdevelopment. Results of this paper are drawn from a systematic literature review which synthesizes findings from twenty-nine newly published research papers published in peer-reviewed journals between 01 January 2020 and 31 December 2024, obtained freely on Google Scholar. The main objective of this paper is to identify the determinants of stock market development across different African countries. From the twenty-nine reviewed papers, it can be noted that the key determinants include macroeconomic indicators such as economic growth, inflation, interest rates, trade openness, and foreign investment. The review of literature highlighted the mixed effects of these factors, indicating that their influence can vary significantly across countries and regions. Stakeholders, such as policymakers, investors, and financial institutions, have shown increasing interest in understanding these dynamics due to the potential for stock markets to enhance capital mobilization and economic resilience. The review of literature also identified contested areas in the literature, suggesting that while some determinants are widely acknowledged, others remain debated. Future research directions include exploring the impact of technological advancements, regulatory frameworks, and socio-political factors. This paper underscores the need for a nuanced understanding of stock market dynamics to inform effective policy interventions aimed at fostering sustainable economic growth in Africa.

VL  - 13
IS  - 2
ER  -

Copy | Download

Author Information

Wellington Garikai Bonga

Department of Law, University of Nicosia Africa, Lusaka, Zambia

Contact Email

http://orcid.org/0000-0001-8992-5584
Peterson Kitakogelu Ozili

Economic Research Department, Central Bank of Nigeria, Abuja, Nigeria

Contact Email

http://orcid.org/0000-0001-6292-1161
Ireen Choga

Department of Economic and Management Sciences, North-West University, Mahikeng, South Africa

Contact Email

http://orcid.org/0000-0002-7911-2966

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Bonga, W. G., Ozili, P. K., Choga, I. (2025). Stock Market Development Determinants in Africa: A Review of Literature. International Journal of Economics, Finance and Management Sciences, 13(2), 61-69. https://doi.org/10.11648/j.ijefm.20251302.12

Copy | Download

ACS Style

Bonga, W. G.; Ozili, P. K.; Choga, I. Stock Market Development Determinants in Africa: A Review of Literature. Int. J. Econ. Finance Manag. Sci. 2025, 13(2), 61-69. doi: 10.11648/j.ijefm.20251302.12

Copy | Download

AMA Style

Bonga WG, Ozili PK, Choga I. Stock Market Development Determinants in Africa: A Review of Literature. Int J Econ Finance Manag Sci. 2025;13(2):61-69. doi: 10.11648/j.ijefm.20251302.12

Copy | Download

@article{10.11648/j.ijefm.20251302.12,
  author = {Wellington Garikai Bonga and Peterson Kitakogelu Ozili and Ireen Choga},
  title = {Stock Market Development Determinants in Africa: A Review of Literature
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {13},
  number = {2},
  pages = {61-69},
  doi = {10.11648/j.ijefm.20251302.12},
  url = {https://doi.org/10.11648/j.ijefm.20251302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20251302.12},
  abstract = {The development of stock markets is crucial for economic growth, capital formation, and financial stability, particularly in Africa, where economies are often characterised by volatility and underdevelopment. Results of this paper are drawn from a systematic literature review which synthesizes findings from twenty-nine newly published research papers published in peer-reviewed journals between 01 January 2020 and 31 December 2024, obtained freely on Google Scholar. The main objective of this paper is to identify the determinants of stock market development across different African countries. From the twenty-nine reviewed papers, it can be noted that the key determinants include macroeconomic indicators such as economic growth, inflation, interest rates, trade openness, and foreign investment. The review of literature highlighted the mixed effects of these factors, indicating that their influence can vary significantly across countries and regions. Stakeholders, such as policymakers, investors, and financial institutions, have shown increasing interest in understanding these dynamics due to the potential for stock markets to enhance capital mobilization and economic resilience. The review of literature also identified contested areas in the literature, suggesting that while some determinants are widely acknowledged, others remain debated. Future research directions include exploring the impact of technological advancements, regulatory frameworks, and socio-political factors. This paper underscores the need for a nuanced understanding of stock market dynamics to inform effective policy interventions aimed at fostering sustainable economic growth in Africa.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - Stock Market Development Determinants in Africa: A Review of Literature

AU  - Wellington Garikai Bonga
AU  - Peterson Kitakogelu Ozili
AU  - Ireen Choga
Y1  - 2025/04/29
PY  - 2025
N1  - https://doi.org/10.11648/j.ijefm.20251302.12
DO  - 10.11648/j.ijefm.20251302.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 61
EP  - 69
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20251302.12
AB  - The development of stock markets is crucial for economic growth, capital formation, and financial stability, particularly in Africa, where economies are often characterised by volatility and underdevelopment. Results of this paper are drawn from a systematic literature review which synthesizes findings from twenty-nine newly published research papers published in peer-reviewed journals between 01 January 2020 and 31 December 2024, obtained freely on Google Scholar. The main objective of this paper is to identify the determinants of stock market development across different African countries. From the twenty-nine reviewed papers, it can be noted that the key determinants include macroeconomic indicators such as economic growth, inflation, interest rates, trade openness, and foreign investment. The review of literature highlighted the mixed effects of these factors, indicating that their influence can vary significantly across countries and regions. Stakeholders, such as policymakers, investors, and financial institutions, have shown increasing interest in understanding these dynamics due to the potential for stock markets to enhance capital mobilization and economic resilience. The review of literature also identified contested areas in the literature, suggesting that while some determinants are widely acknowledged, others remain debated. Future research directions include exploring the impact of technological advancements, regulatory frameworks, and socio-political factors. This paper underscores the need for a nuanced understanding of stock market dynamics to inform effective policy interventions aimed at fostering sustainable economic growth in Africa.

VL  - 13
IS  - 2
ER  -

Copy | Download