In the past one decade, stock exchanges have increased from a low of 10 to over 18.  The number could increase in the coming years as more countries try to reap into the underlying benefits of the stock market.  According to the United Nations Development Programme (UNDP), even when adjusted for risk, investment in Africa has yielded high returns.

As markets grow, there is more to offer to investors, who in the recent past have greatly benefited from this growth.  Recent growth has offered a huge benefit to the African investors (both corporate and retail) leaving almost nothing to the foreigners and Africans living outside Africa.

Here is the sad reality.  It has been argued in the past that Kenyans in Diaspora contribute billions of shillings that end up being invested in the United Kingdom and United States. The people account for huge amounts of tax gains on investment.  A paper in the United States quoted the recent real estate boom in the Embakasi- Mombasa road as unexpected, equating it to the discovery of gold.

As the hype still rides high, one wonders: why do our fund managers  put  so much credit on the offshore markets but leave out  emerging markets in Africa?  Africa’s emerging markets amount to so much more compared to Asian markets.  Its potential still outweighs even the hyped potential in the global leaders- including both the United States and the United Kingdom.

The Asian Tigers' potential seemingly lies in their ability to edge themselves by continuous product development and friendlier government policy.  Indeed, the United States has already positioned itself to getting major services from India which was previously sailing on a similar wavelength as Africa.  The underlying factors that greatly helped the ASEAN nations are all ubiquitous in Kenya only that steps to jumpstart the activity are at a snail pace.

The recent steps to automate trading in securities at the Nairobi Stock Exchange (NSE) were in good taste.  It has however taken years to bring it into place and still requires time to move the terminals from the trading floor to the brokerage firms and investment banks.  This is an indication that there is less or slow knowledge based development in our market. 

On another angle, there seems to be a small number of market makers.  The few brokerage firms, investment banks, fund managers and investment advisers have not done much research to come up with new products.  Even Kenya has not done much in commodities exchange.The country lacks a futures and forwards market that would  go a long way in helping investors hedge against risk.

The aggressiveness exhibited by the South African bourse, JSE, should be replicated by other markets that envisage a dynamic market.  Recently, they launched a campaign that sought to woo the best blue chip companies in Africa to list at the JSE.  Most multinationals would still consider South Africa the safest haven when it comes to doing business.  Nevertheless, as a country, such attractiveness did not just come on a silver platter.  The government has worked over the years to keep factors that bar investors from investing at bay.  On the flipside, the Transparency International has just ranked Kenya as the 144th Country in the latest Corruption Index.  This negative signal to potential investors daunts the country’s economy.  With the high ranking in corruption and next year's elections underway, a lot needs to be done before things get worse. 

The recent changes and increasing capitalization of African markets is an indication that a lot of potential  is yet to be seized. As reform efforts take full gear, there will be a lot of dynamics and greater heights being reached.  But the negative aspects that bar Kenya from its potential as an offshore market have to be rooted out.