Financial Openness and Capital Market Development in Sub-Saharan African Countries

This study examined the nexus between financial openness and capital market development in Sub-Saharan African Countries for 30 years period rangingfrom 1990 - 2019. The study proxied financial openness with capital account balance ratio, private capital inflow ratio, number of listed companies, external finance through foreign capital market and per capita income ratio whilecapital market development was measured with market capitalization ratio.The study employed secondary data collected from World DevelopmentIndicators, Securities and Exchange Commission statistical bulletin, and Stock Exchange fact books of the respective countries. The study adopted ex-post facto research design while the time series data were analyzed usingdescriptive statistics, correlation, unit root test, granger causality test, Johansen co-integration and error correction model via E-Views 10. The result revealed that there is a significant positive relationship between capital account balance ratio and market capitalization ratio in South Africa; nosignificant relationship between capital account balance ratio and marketcapitalization ratio in Nigeria; a significant negative relationship between capital account balance ratio and market capitalization ratio in Zimbabwe; a significant positive relationship between private capital inflow ratio and market capitalization ratio in South Africa; a significant positive relationship between private capital inflow ratio and market capitalization ratio in Nigeria; a significant negative relationship between capital account balance ratio and market capitalization ratio in Zimbabwe; a significant positive relationship between number of listed companies and market capitalization ratio in South Africa; a significant positive relationship between number of listed companies and market capitalization ratio in Nigeria; a significant positive relationship between number of listed companies and market capitalization ratio inZimbabwe; a non-significant negative relationship between external finance through foreign capital market and market capitalization ratio in South Africa; a significant negative relationship between external finance through foreign capital market and market capitalization ratio in Nigeria; a significant positive relationship between external finance through foreign capital market andmarket capitalization ratio in Zimbabwe; a significant positive relationship between per capita income ratio and market capitalization ratio in SouthAfrica; a significant positive relationship between per capita income ratio and market capitalization ratio in Nigeria; a significant positive relationship between per capita income ratio and market capitalization ratio in Zimbabwe at 5% level of significance respectively