How Liquid Are African Stock Markets?

Liquidity varies significantly across African stock exchanges.

Some markets support substantial trading activity, while smaller exchanges may experience limited daily volumes, wide bid-ask spreads, and periods with few transactions.

Liquidity measures how easily an investor can buy or sell securities without materially affecting their price.

Which African Markets Are the Most Liquid?

The OECD’s Africa Capital Markets Report 2025 examined trading activity across African exchanges.

Its findings indicate that 9 of the 14 exchanges studied had annual turnover ratios below 5%, demonstrating how trading activity remains concentrated in a relatively small number of markets.

Selected turnover ratios cited in the report include approximately 50% for Egypt, 28% for South Africa, 9% for Morocco, 6% for Kenya, and 5.5% for Nigeria, using the study’s observation periods.

These ratios measure the value of shares traded relative to market capitalization.

Why Does Liquidity Matter?

Liquidity affects the price an investor receives when buying or selling shares.

A highly liquid stock generally has more active buyers and sellers, making it easier to execute transactions close to quoted market prices.

Thinly traded shares can be more difficult to sell.

For example, selling a $20,000 position in a stock with daily trading activity of only $2,000 may require several trading sessions.

How Can Investors Manage Liquidity Risk?

Investors should review average trading volumes, bid-ask spreads, free float, and order-book depth before purchasing securities.

Limit orders can help control the maximum purchase price or minimum sale price, although execution is not guaranteed.

Explore trading activity and company information through Daba’s NGX and BRVM market pages.