http://www.vanguardngr.com/articles/2002/business/september06/19092006/b219092006.html Nigeria and other Africa stock market immature - IMF By Omoh Gabriel Business Editor Posted to the Web: Tuesday, September 19, 2006 SINGAPORE -The International Monetary Fund, IMF has described capital market in Africa as immature that are not capable of helping companies raise required capital for their operation. In its 2006 regional economic outlook for sub Sahara Africa released in Singapore on Friday, the Fund said Stock markets in Africa remain immature. The report further said except in South Africa and Zimbabwe, average market capitalisation is about 27 per cent of GDP, it is as low as 1.4 per cent in Uganda. In the case of Nigeria there are only 207 companies listed on the exchange while South Africa has 403. Egypt the only IMF listed emerging market in Africa has 962 companies listed on its Exchange. This the IMF said is in contrast with emerging markets like Malaysia, which has a capitalisation ratio of about 161 per cent of GDP. The report said that market liquidity is low, turn over ratio are as little as 0.02 per cent. Low liquidity it said implies greater difficulty in supporting a local market with its own trading system, market analysis, and brokers, because of the low business volume. The report further said economic growth in sub_Saharan Africa is expected to remain robust, despite high oil prices. Thanks mainly to the prudent macroeconomic policies of countries in the region, inflation remains under control. These were among the main findings of the fall 2006 issue of the sub_Saharan Africa Regional Economic Outlook, which the International Monetary Fund released Sunday. Abdoulaye Bio-TchanÃ, Director of the IMF's African Department, highlighted the report's main findings: Real GDP in sub-Saharan Africa is projected to grow by 4.8 percent in 2006. Although below the rate of 5.6 percent in 2005" largely because of a temporary slowdown in oil production in oil-exporting countries like Equatorial Guinea, Chad, and Nigeria and a moderation of growth in South Africa to more sustainable levels"this growth performance demonstrates the growing robustness of economic growth in sub-Saharan Africa. Growth in oil-importing countries as a whole is expected to decline to 4.5 percent from 5 percent in 2005, though 17 of these countries"about the same number as in 2005"are expected to experience growth of 5 percent or more. In many oil importing countries, the impact of persistently high petroleum prices has been mitigated by rising export prices for non-fuel commodities and by growing domestic investment. Looking ahead to 2007, GDP growth for the region as a whole is projected to rise to about 6 percent. Growth in oil-exporting countries as a group could accelerate to 10 percent, mainly because oil production is rising in Angola and Equatorial Guinea. Growth in oil-importing countries should remain steady at 4.6 percent. Inflation for the region (excluding Zimbabwe) is projected to fall further, to 6 percent. There are downside risks to this favorable picture, however. Export demand could be lower if activity in the rest of the world slows from the impact of global imbalances and tighter monetary policies. Growth and inflation could also be adversely affected by further increases in oil prices and a larger-than-expected fall in nonfuel commodity prices. And there are still political risks in a number of countries in the region. Our analysis of the impact of higher oil prices reveals some policy challenges for African governments. Since 2003, governments in most countries in the region have passed a relatively large portion of higher oil prices through to domestic retail prices. Rising oil prices have thus cut into the real income of the poorest population groups. Addressing this impact will be difficult for policy makers where there are no effective safety nets for the poor. Many countries are using indirect instruments to shield the poor, such as subsidizing kerosene (given its importance in the lives of the poor) and public transportation, and reducing or eliminating charges for public services like health and education, subject to the overall fiscal constraints. According to our analysis of eight countries in sub_Saharan Africa, oil and other fuel price increases in 2003_05 may have lowered.