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
The National Insurance Commission (NAICOM) has said the passage of the National Insurance Regulatory Commission Bill by the Senate will unlock greater investment in Nigeria by strengthening regulatory oversight, enhancing investor confidence and creating a more transparent and accountable insurance industry.
Describing the development as a significant milestone in efforts to strengthen the regulatory framework of Nigeria’s insurance industry, the commission particularly praised the leadership of the Senate and the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Mr Adetokunbo Mukail Abiru, for their roles in securing the successful passage of the Bill in the Red Chamber.
According to NAICOM, the proposed legislation will enhance regulatory oversight, improve transparency and accountability, and boost public confidence in the insurance sector.
The commission said the bill is expected to attract greater investment into the industry, promote sustainable growth, and deliver benefits to policyholders, insurance operators, and the wider economy.
NAICOM also noted that the Senate’s commitment to advancing reforms in the insurance sector would support the modernisation of insurance regulation and strengthen financial inclusion across the country.
It added that the passage of the Bill reflects the legislature’s resolve to protect the interests of citizens while promoting the stability of Nigeria’s financial system.
The Commission reaffirmed its readiness to ensure the effective implementation of the new legal framework once the Bill receives presidential assent, pledging continued collaboration with industry stakeholders to position the insurance sector as a key driver of national economic development.
Earlier this week, the Senate passed the much-anticipated bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
According to lawmakers, the outgoing National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the country’s insurance business and projections.
By Aduragbemi Omiyale
About $2.5 billion has been raised by Dangote Petroleum Refinery and Petrochemicals FZE (DPRP) from its private equity placement.
The exercise, Business Post learned, attracted broad participation from international and African institutional investors, sovereign-related investment vehicles, development finance institutions, strategic partners, and individual investors.
Notable participants included the Africa Finance Corporation (AFC) and India Infra Buildco, an investment vehicle facilitated by the African Export-Import Bank (Afreximbank), reflecting deep and diversified confidence in DPRP’s long-term prospects.
The transaction is believed to be Africa’s largest publicly disclosed primary equity private placement, marking a significant milestone in the history of the organisation and demonstrating strong investor confidence in the refinery’s long-term growth strategy, including raising its current capacity from 700,000 barrels per day to 1.4 million barrels per day.
The capital raise is the first equity funding round involving external investors beyond the company’s legacy shareholder base, underscoring the growing attractiveness of DPRP as a world-class energy and industrial enterprise. The strong investor response further reinforces confidence in the company’s vision and its ability to deliver sustainable value over the long term.
The proceeds from the placement will be deployed to support the continued expansion of the refinery and petrochemical complex, strengthen the company’s capital structure, and enhance financial flexibility to pursue future growth opportunities.
With the successful completion of the placement, DPRP is well-positioned to accelerate its long-term growth strategy while strengthening Africa’s energy security through world-scale refining and petrochemical capacity.
“This transaction represents a strategic step to deepen and further institutionalise the Enterprise’s shareholder base, while raising capital to complement our internal cash flows and external funding as DPRP advances its expansion agenda.
“It also demonstrates our unwavering commitment to developing Africa’s refining and petrochemical capacity, reducing dependence on imported petroleum products and strengthening the continent’s energy security,” the chief executive of Dangote Industries Limited and Chairman of DPRP, Mr Aliko Dangote, stated.
Also, the chief executive of Dangote Petroleum Refinery, Mr David Bird, said the overwhelming investor response validates the company’s operational performance and growth outlook.
“The exceptional demand we witnessed is a testament to our operational excellence, execution capability and the confidence investors have in DPRP’s leadership and future potential,” he remarked.
By Aduragbemi Omiyale
Shareholders of Transcorp Plc should expect their phones to buzz with bank alerts very soon, as the board has proposed the payment of an interim dividend of 40 Kobo per share for the first half of the 2026 fiscal year.
The company announced the cash reward payment to investors in the unaudited financial statements submitted to the Nigerian Exchange (NGX) Limited.
The interim dividend would be paid on Tuesday, July 28, 2026, subject to appropriate withholding tax deduction and to shareholders whose names appear in the Register of Members as of the close of business on Thursday, July 23, 2026.
Analysis of the results showed that the conglomerate delivered a strong revenue and profit performance, with improved margins and ratios notwithstanding challenges in the operating environment.
The performance was driven by the organisation’s disciplined cost management and operational efficiency, underpinned by a resilient business strategy and solid corporate governance ethos.
In the period under review, the power sector was impacted by gas supply constraints, as well as grid-related challenges, which saw a reduction in the overall power supply in the country.
Similarly, the hospitality business continues to innovate and leverage its assets to deliver superior service excellence.
These challenges impacted Transcorp’s earnings, which contracted to N241.5 billion in the first half of this year from N279.0 billion in the corresponding period of 2025, while profit after tax moderated to N54.4 billion from N65.2 billion in H1 2025.
“These results reflect the quality of the underlying business and resilience of the group’s earnings. Despite a lower revenue base arising from sector-wide power infrastructure constraints, we expanded our profit-before-tax margin to 31.4 per cent, from 30.7 per cent in the prior period, a direct result of disciplined cost optimisation and operational efficiency across our businesses.
“Our financial position remains strong, with a robust equity base which grew to N367.8 billion by half-year 2026. Our strength is hinged on the diversified earnings capability from key sectors, including the hospitality business, which grew its profit after tax by 21 per cent. This financial foundation gives us the confidence to protect and grow long-term value for our shareholders as operating conditions normalise,” the Chief Financial Officer of Transcorp, Mr Festus Izevbizua, stated.
Also, the chief executive of the firm, Mr Owen Omogiafo, said, “Despite disruptions to power transmission infrastructure and a challenging macroeconomic environment, Transcorp delivered a strong profit and an even stronger balance sheet, a reflection of our operational discipline and efficiency.
“At Transcorp Group, our operations are driven by our purpose to improve lives and transform Africa. We continue to create impact in the sectors that matter most to Nigeria’s future, and that same conviction continues to guide us through every phase of the cycle.
“Despite the constrained grid infrastructure seen in the first half of the year, we forged ahead, engaging with strategic partners to deliver much-needed power to Nigerians.
“Through our 5,000-capacity, multi-purpose event facility, Transcorp Centre, and our flagship 1,000-key Transcorp Hilton Abuja, we have continued to make the Federal Capital Territory the preferred location for business and leisure.
“Our strategy is clear, our balance sheet is robust, and our confidence in the value we are creating for our shareholders remains firm.”
