African markets entered August with substantial but highly uneven returns. At the end of July, Ghana, Nigeria, Tanzania and several smaller exchanges had recorded strong local-currency gains, while South Africa and Morocco remained negative for the year.
The headline numbers require careful interpretation. Currency movements, transaction costs, dividends and market liquidity can cause an investor’s actual return to differ significantly from an index’s published performance.
Currency-adjusted returns matter
An index that rises by 50% in its domestic currency does not necessarily deliver a 50% return to a South African investor. If the local currency weakens against the rand during the investment period, part of the market gain may be lost when the proceeds are converted. A strengthening currency can have the opposite effect.
Liquidity can change what is realistically executable
Liquidity is equally important. Some African exchanges have comparatively low turnover and limited free float. An investor may therefore struggle to buy or sell a meaningful position at the quoted market price—even when the headline index is rising.
Oil and geopolitical risk remain important
Oil prices fell sharply on 3 August following renewed diplomatic efforts involving the United States and Iran, together with OPEC+’s decision to increase September production quotas by approximately 188,000 barrels per day. Shipping disruptions have not been fully resolved, however, leaving fuel costs, inflation and African currencies exposed to sudden changes.
A regional settlement development
In Southern Africa, the addition of the Angolan kwanza to the SADC regional settlement system is a potentially important trade development. It may gradually support more efficient transactions between Angola, South Africa and other regional markets, although practical availability will depend on participating banks and currency liquidity.
What Besther Intelligence™ is monitoring
Besther Intelligence™ is monitoring African exchange and currency performance, liquidity and investor access, oil and precious metals, Ghana’s post-IMF transition, Kenya’s telecom and financial-services sector, Nigeria’s market conditions and SADC trade-payment developments.
The central investor lesson is simple: compare currency-adjusted and realistically executable returns—not only headline index gains.