Economy
What is Behind South Africa’s and Namibia’s Capital Market Developments?
When diamonds and gold were found in South Africa in the late 1800s, the economy was transformed. Following that, a large amount of global money was invested.
The nation has grown a well-developed industrial base in the years after World War II, and it has undergone extremely volatile growth rates, including several years when it was among the highest in the world.
South Africa, on the other hand, has had persistent economic difficulties since the late 1970s, owing to its apartheid policies, which caused many countries to suspend foreign investment and enforce more harsh trade restrictions against it.
Namibia has been classified as a lower-middle-income country with a per capita gross domestic product (GDP) that is slightly higher than the average for Sub-Saharan African countries.
However, the summary is deceptive. Only one-quarter of all Namibians and one-sixth of black Namibians have decent incomes; up to two-thirds of the population lives in abject poverty with inadequate access to public services. Because of a declining productive industry, a shortage of capital stock and serious world market problems for base metals and uranium oxide, economic development remains a challenge.
Furthermore, unless foreign assistance investments quickly turn into significant real inflows and private external investment in mining, manufacturing, and fisheries occurs, the one segment of the GDP that expanded steadily in the 1980s would decrease.
South Africa
The South African Reserve Bank, which is the sole issuing authority for the rand, the national currency, has a well-developed financial structure. It is in charge of monetary policy formulation and implementation, as well as managing foreign exchange trades.
There are several licensed banking institutions, many of which focus on commercial banking, as well as merchant, deposit, and investment banking, to name a few.
The Development Bank of Southern Africa, for example, is a quasi-governmental organization that promotes development programs. The banking market is dominated by private pension and provident funds, as well as more than two dozen insurance providers. The Johannesburg Stock Exchange is the centre of an active capital market.
South Africa, Africa’s second-largest economy after Nigeria, has a GDP that is far greater than that of its sub-Saharan neighbours. The Johannesburg Stock Exchange (JSE), which is 132 years old and has a market capitalization of more than USD1 trillion, is the biggest stock exchange in Africa.
The JSE is a comprehensive and cutting-edge exchange that offers complete electronic trading, clearing, and settlement of stocks, shares, and interest-rate securities, as well as financial, asset, and currency trading in South Africa.
On the JSE, there are approximately 350 companies listed, with industrials being the largest grouping, led by energy companies such as mines and oil companies.
The JSE, on the other hand, is facing strong headwinds. After decades with little competition, the JSE is now being tested by smaller competitors such as ZAR X, a low-cost model launched in 2016 to offer stock access to lower-income individuals.
Since then, new entrants have entered the ring, including A2X, 4AX, and the Equity Express Securities Exchange, which focuses on black economic empowerment. The market is currently focused on the newly implemented ‘twin peaks’ regulatory model, which response to weak financial sector policies and insufficient regulatory supervision.
It is intended to promote consumer trust and stimulate capital formation, much as it was in Australia, where the concept first debuted.
Namibia Profile
The majority of banking activity is handled by two commercial banks, First National Bank of Southern Africa and Standard Bank Namibia (both branches of South African parent companies). Following independence, land, infrastructure, and development banks were reorganized. In the mid-1990s, the Central Bank of Namibia introduced the Namibian dollar as an independent currency to replace the South African rand.
The Namibian Stock Exchange (NSX) currently has 50 listed companies. Namibia has the second-lowest population density of any sovereign nation, with just 2.6 million people.
The NSX was established in 1904 to help finance the country’s diamond rush. The rush was over by 1910, and the exchange was suddenly closed. The NSX did not reopen until 1992, 82 years later, with start-up funding from 36 Namibian companies.
Despite the fact that agriculture and tourism are important parts of the economy, other industries dominate the stock exchange. In reality, three industries account for half of the NSX’s listings: banking (four companies), mining (seven companies), and finance (three companies).
It is only recently that debt has been issued and listed. Namibia had virtually no public debt until 2011. In reality, the nation had one of the lowest debt-to-GDP ratios in the world, at just 16 per cent of GDP. International rating agencies downgraded the country to a sub-investment rating in 2017 due to the dramatic increase in public debt.
Namibian state-owned corporations and private businesses have floated bonds worth more than NAD33 billion (approximately £1.73 billion) on the NSX. As traditional financing sources dry up, more Namibian firms are expected to issue bonds in the immediate future. Because of the economic crisis, banks’ balance sheets and loan-to-deposit ratios have been strained, and they are less likely to lend to corporations.
The withdrawal of traditional finance provides an incentive for small businesses to raise money from their balance sheets, collateralized or government-guaranteed debt securities, or stock offerings on the local exchange.
The Report
From a small lunch party in New York City in 1937 to a vast array of 170,000 members and 157 societies in 2019, the Investment Club has grown to become the world’s largest investment organization, dedicated to leading the investment profession internationally for the ultimate good of society.
Early colonial times saw the establishment of several African exchanges. After the diamond and gold rush, South Africa led the way, followed by Zimbabwe, Egypt, and Namibia (at the time, a German colony) – all before 1905. Some businesses did not survive the commodity boom, but most are flourishing despite being significantly diversified and modernized.
Nigeria in the 1960s; Botswana, Mauritius, and Ghana in 1989; Namibia after its independence from South Africa in the 1990s.
Others, especially the East African exchanges, are relatively recent and are rapidly growing in popularity. All of these examples show how regulation, trading technologies, and fintech are allowing more market players to participate in finance and investing in a fairer, quicker, and lower-cost manner.
The African Securities Exchanges Association collaborated on the CFA Institute Research Foundation brief (ASEA).
By Adedapo Adesanya
All insurance and reinsurance companies operating in Nigeria are required to remit 0.25 per cent of their annual net premium income to a new fund, according to new guidelines by the National Insurance Commission (NAICOM).
The insurance regulator has issued binding guidelines for a new industry-wide protection fund that will compel every licensed insurer and reinsurer in the country to make annual cash contributions, or risk losing their operating licence.
NAICOM published the framework for the Insurance Policyholders’ Protection Fund (IPPF) under the authority of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which was signed into law last August.
The guidelines, which take effect immediately, did not disclose an initial capitalisation target for the fund or a timeline for when it would be considered adequately funded for resolution purposes.
The IPPF is designed to function as a resolution backstop as a capital pool available to settle outstanding policyholder claims when a licensed insurer or reinsurer becomes insolvent or enters regulatory distress.
The mechanism addresses a longstanding vulnerability in the Nigerian market, where policyholders holding valid claims against failed insurers have historically had no guaranteed recourse.
The 0.25 per cent payments are due into designated deposit money bank accounts no later than June 30 each year.
NAICOM said it will supplement industry contributions by injecting 0.25 per cent of the balance held in the existing Security and Insurance Development Fund (SIDF) into the IPPF annually, creating a dual-stream capitalisation model.
The guidelines state explicitly that failure to remit the full assessed contribution within the stipulated timeframe shall constitute grounds for suspension or cancellation of an operator’s licence. The same penalty framework applies to defaults on any loans extended from the fund.
Day-to-day management of the IPPF will be delegated to an independent professional Fund Manager, subject to a minimum paid-up capital threshold of N5 billion.
Investment activity is restricted to low-risk, government-backed instruments. This is a deliberate constraint intended to preserve liquidity and protect the fund from market volatility.
Members are bound by a Code of Conduct that bars them from using their positions for personal advantage or to direct decisions in favour of any insurer, reinsurer, or connected party.
The guidelines introduce a mandatory early-warning mechanism: insurance operators who become aware of imprudent practices within their organisations or elsewhere in the industry are required to report such conduct to NAICOM within five working days.
The commission has provided explicit anti-retaliation protections, stating that no whistleblower shall be subjected to retaliation, intimidation, or any form of adverse action for making a disclosure.
By Modupe Gbadeyanka
President Bola Tinubu has been called on to use his influence to halt the passage of the proposed Customs, Excise and Tariff Amendment (CETA) Bill.
The proposed piece of legislation is currently before the National Assembly, and it seeks to introduce a percentage levy per litre of the retail price on non-alcoholic beverages.
In an outlined advertorial published in key newspapers, the Organised Private Sector of Nigeria urged the federal government to engage with the leadership of the parliament to stop the ongoing legislative process with a view to stepping down the CETA Bill, thus allowing the executive-led fiscal reforms to be fully integrated and aligned.
The OPS comprises the Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Small Scale Industrialists (NASSI), and the Nigerian Association of Small and Medium Enterprises (NASME).
In the advertorial signed by the presidents of all members of the group, it was submitted that allowing for more talks would strengthen policy coherence, enhance predictability, and improve the effectiveness of the nation’s excise framework.
It was stressed that halting the bill would also encourage structured, evidence-based engagement with industry stakeholders, thereby ensuring that any future measures will effectively balance revenue generation, public health objectives, and economic sustainability.
“While we fully support well-designed fiscal reforms and evidence-based public health interventions, we are concerned that the Bill, in its current form, raises significant social, economic, administrative, and legal issues that could undermine Your Excellency’s broader fiscal reform objectives,” the body stated.
While calling on the government to restrain the Senate from proceeding with the process, the organisation noted that the proposed levy would therefore constitute a regressive measure, reducing consumer purchasing power without providing viable alternatives or meaningful public health support.
Commenting on the impact of such a levy on industry stability, investment, and employment, OPS stated that the sector was already under severe pressure from exchange rate adjustments, high energy costs, and rising prices of imported inputs, packaging materials, and machinery.
“An additional excise burden would further increase production costs, reduce capacity utilisation, delay or cancel planned investments, and threaten the livelihoods of thousands of small distributors, retailers, and informal traders who depend on high-volume, low-margin sales.
“These pressures would inevitably be passed on to consumers through higher prices, leading to reduced demand and potential further job losses across the value chain,” it stated.
While commending the president for the leadership and bold economic reforms undertaken since assuming office in 2023, it noted that the reforms have played an important role in restoring macroeconomic stability and rebuilding confidence within the business community.
By Adedapo Adesanya
Three stocks further weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.12 per cent on Wednesday, April 8, with the Unlisted Security Index (NSI) down by 44.43 points to 3,930.91 points from the previous day’s 3,975.34 points, and the market capitalisation went down by N26.59 to N2.351 trillion from N2.378 trillion.
MRS Oil lost N11.00 during the session to close at N161.00 per share compared with Tuesday’s closing price of N172.00 per share, Central Securities Clearing System (CSCS) Plc dipped by N3.74 to N67.95 per unit from N71.69 per unit, and Afriland Properties Plc fell by N1.10 to sell at N15.95 per share versus N17.05 per share.
There were two gainers at the midweek trading session, led by IPWA Plc, which appreciated by 55 Kobo to N6.61 per unit from N6.06 per unit, and First Trust Mortgage Bank Plc improved its value by 4 Kobo to N2.32 per share from N2.28 per share.
Yesterday, the volume of securities rose by 620.4 per cent to 5.7 million units from 797,264 units, the value of securities increased by 25.1 per cent to N32.7 million from N26.1 million, and the number of deals climbed by 12.1 per cent to 37 deals from the preceding session’s 33 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, trailed by CSCS Plc with 57.2 million units exchanged for N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
GNI Plc also finished the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Resourcery Plc with 1.1 billion units worth N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
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