Efficiency of African Exchanges - A Mixed Picture

African stock exchanges play a pivotal role in fostering economic growth across the continent by mobilising capital, facilitating investments, and supporting diversification beyond commodities. As of early 2026, these markets—such as the Nigerian Exchange (NGX), Egyptian Exchange (EGX), Casablanca Stock Exchange (CSE), and Nairobi Securities Exchange (NSE) — have shown resilience amid global uncertainties, but their functioning and efficiency in price discovery reveal a mixed picture, shaped by structural challenges such as political instability, currency volatility and sporadic trading halts resulting in reduced foreign inflows.

However, in terms of overall functioning, many African exchanges demonstrated robust performance in 2025, driven by recovering commodity prices, digital innovations, and increased local investor participation. The Malawi Stock Exchange led with an astonishing 259.98% year-to-date return, followed by Ghana at 76.13%, Zambia's Lusaka Securities Exchange at 63%, and Nigeria's NGX at 39.44%. Egypt and Tunisia also posted solid gains of 34.63% and 32.33%, respectively. These figures reflect improved trading volumes and market capitalisation, with the NGX, for instance, benefiting from regulatory reforms and technological upgrades that enhanced accessibility for SMEs. 

Regarding efficiency in price discovery — the process of how well markets incorporate information into asset prices (and these exchanges generally fall short of developed market standards), past studies (2010/2011) on weak-form efficiency actually indicated normal distributions of price data studied across key markets. These studies rejected the random walk hypothesis (that stock markets are totally unpredictable) in Botswana, Egypt, Kenya, Morocco, Nigeria, and Tunisia, showing that positive autocorrelation exists, resulting in reliable analysis of price data. However, a recent 2025 study on 14 African countries found mixed results, with most countries (including Nigeria, Kenya) adhering to random walks, but others like Morocco do not!

In conclusion, while African stock exchanges are improving and delivering high returns, their price discovery efficiency remains hampered by liquidity constraints and informational gaps. Mixed results seem to be enduring, opening up opportunities for companies, other than exchanges, to assist banks, traders and investment funds with prices and valuations of commodity traded in Africa. enabling arbitrage across countries and continents.