A Comparative Analysis of Macroeconomic Variables and Stock Market Performances in Africa (2000-2015)

The study aimed at evaluating the impact of macroeconomic variables on stock market performance in Africa from the period of 2000 to 2015. Four major African countries investigated were: Ghana, Kenya, South Africa and Nigeria. The specific objectives were to establish the extent to which GDP, inflation rate and real exchange rate affect the stock market performance represented by share price index. Time series data were employed and analyzed using multiple regression and t-test for hypotheses testing. With the use of SPSS software the result revealed negative impact of GDP, inflation and real exchange rate on SPI in Nigeria. Insignificant relationship of all the variables was also observed. The result for South Africa’s stock market showed that GDP and inflation had a negative impact on stock market and real exchange rate has no impact on the stock market. The impact of GDP on Ghana’s stock market was negative while the others had no impact. Real exchange rate had negative impact on Kenyan stock market, but GDP and inflation had no impact. The researchers therefore conclude that macroeconomic variables have to be checked by the government of the African countries to avoid this scenario of negative effects since they are major determinant of the success of the stock markets in every economy.