THE DEVELOPMENT OF MICRO-CAP SECURITIES MARKETS IN
SUB-SAHARAN AFRICA: NEW APPROACHES TO FOSTERING ENTERPRISE GROWTH
by Professor Stuart R. COHN
(Article Reference: Document No.18, November 2002)

Conclusion

With rare exception, capital markets in sub-Saharan countries have not developed or grown as hoped. There are numerous reasons, including a lack of quality parastatal privatisations, a reluctance on the part of privately owned companies to raise capital through public offerings, and restrictive company and securities laws and stock exchange requirements. Continuing along the same path offers little promise for significant growth. Innovative thinking and the adoption of new measures is necessary. In every country in the region there are numerous SME's that could grow and prosper through the infusion of additional capital. Attention must be directed to how to facilitate such capital funding within the regulatory system. Investor protection and business development are not mutually exclusive concepts. Indeed, both can be achieved and a viable, efficient securities market can be developed for SME's.

SME's hold the promise of the future, they are the instruments for achieving NEPAD's laudable goals. The creation of capital-funding opportunities and micro-cap markets for SME's is well within current capacities. There must be a will to innovate. If the will exists, viable micro-cap markets can be achieved within a relatively short time frame. The proposals set forth in this paper are intended to provide food for thought and a potential programme for reform. Although innovative, the proposals are well within the boundaries of sound policy and practice. It is hoped that NEPAD's vision of enhanced capital markets will spur consideration of new approaches to the fostering of enterprise growth.

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