Journal of Financial Risk Management, 2020, 9, 252-267 https://www.scirp.org/journal/jfrm ISSN Online: 2167-9541 ISSN Print: 2167-9533 DOI: 10.4236/jfrm.2020.93014 Sep. 25, 2020 252 Journal of Financial Risk Management Effects of Monetary Policy on Stock Market Performance in Africa Evidence from Ten (10) African Countries from 1980 to 2019 Michael Asiedu 1* , Emmanuel Owusu Oppong 2 , Orazgylyjova Gulnabat 2 1 School of Finance, Zhongnan University of Economics and Law, Wuhan, China 2 School of Finance, Central Uinversity of Finance and Economics, Beijing, China Abstract For a better insight and understanding of how monetary policy and the fi- nancial market in less developed countries such as those in Africa are interre- lated; there is a need to also understand and appreciate the fundamentals of these economies and the associating imperfections within their financial sys- tems due to the fact that they are less liberalized, relatively young, highly illi- quid, logistically constrained among others. This study is a comprehensive analysis of the dynamics in stock market performance following changes in monetary aggregates in ten (10) selected African countries from 1993 to 2019. We adopted three stock market performance indicators; namely S & P global equity index, stock turnover and stock market capitalization as dependent va- riables and inflation, broad money growth, exchange rate, real interest rate and commercial bank and lender serving as independent variables. We then employed the random effect model based on our results from the Hausman test and VECM after co-integration was established among the variables. The study established the presence of a monetary transmission mechanism fol- lowing changes in money supply. We found that growth in broad money po- sitively affects the stock market performance through the interest rate chan- nel. Interest rate and inflation recorded negative effects on stock market per- formance indices. We also found that changes in monetary policy are highly significant in stock market performance in the West African market due to the relatively high level financial openness in the countries under considera- tion. Keywords Broad Money Growth, Inflation, Exchange Rate, S & P Global Equity Index How to cite this paper: Asiedu, M., Op- pong, E. O., & Gulnabat, O. (2020). Effects of Monetary Policy on Stock Market Per- formance in Africa Evidence from Ten (10) African Countries from 1980 to 2019. Journal of Financial Risk Management, 9, 252-267. https://doi.org/10.4236/jfrm.2020.93014 Received: August 15, 2020 Accepted: September 22, 2020 Published: September 25, 2020 Copyright © 2020 by author(s) and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/ Open Access