Streaming issues? Report here
Deutsche Welle DW logo
DW Hour
00:00 - 01:00
volume_up
volume_mute

Up Next: Best of Talk
See full line-up
DW Hour
00:00 - 01:00
Home
arrow_forward
Business
arrow_forward
Africa

Financial markets in Africa are increasingly supportive of investment

25 October 2019 11:32 AM
Tags:
Zambia
Ethiopia
Kenya
Egypt
Nigeria
Tanzania
Africa
Rwanda
Angola
Ghana
South Africa
Mozambique
Cameroon
Ivory Coast
Morocco
Uganda
Mauritius
Namibia
Botswana
Absa
Senegal
Seychelles
Absa Africa Financial Markets Index
OMFIF
George Asante
Charles Russon
David Marsh
Akiules Neto
Angola Securities Exchange
South Africa still tops the Absa Africa Financial Markets Index but other countries on the Continent are snapping at its heels.

Summary:

  • Average overall score climbs to 52.7 out of 100 in 2019 from 49.6 in 2017

  • Countries perform best in ‘market transparency, tax and regulatory environment’

  • Biggest improvement was in ‘legality and enforceability of standard financial markets master agreements’, where the average score jumps to 55 from 47

  • South Africa still tops the index due to its sizeable lead in ‘market depth’, but other index countries are catching up

  • Egypt has the highest score in ‘macroeconomic opportunity’, overtaking South Africa

  • Mauritius and Kenya claim the two top spots in ‘legality and enforceability of standard financial markets master agreements’

  • Ethiopia, which announced plans to launch a stock exchange in 2020, shows significant potential for improvement in the coming year

Photo by energepic.com from Pexels.

Listen to Absa's George Asante discuss South Africa's sizeable – but shrinking - lead in the Absa Africa Financial Markets Index 2019.

New financial products, regulatory improvements and more responsive economic policies have enhanced the performance of countries in the Absa Africa Financial Markets Index 2019, produced by OMFIF. Now in its third year, the index evaluates the financial market development in 20 countries across the continent.

South Africa retains the top position due to its sizeable lead in Pillar 1, ‘market depth’. While it is likely to remain an outlier in this pillar, the creation of new bourses and key mergers between existing ones will improve the standing of other countries in the coming years. This year, Botswana, Kenya and Namibia join the ranks of countries that score more than 50 in Pillar 1, indicating a deepening of individual markets.
Other countries are catching up in the rest of the index. Egypt has the highest score in ‘macroeconomic opportunity’, while Mauritius and Kenya claim the two top spots in ‘legality and enforceability of standard financial markets master agreements’. Ethiopia, although lagging, has significant potential for improvement in the coming year. It has announced plans to establish a stock exchange in 2020.

‘The steady improvement across African countries is partly a testament to the impact of our index across the continent,’ says George Asante, head of global markets for Absa regional operations.

‘There has been a concerted effort among African policy-makers to react to the findings. This can be seen in the vast improvements in Pillar 6, ‘legality and enforceability of standard financial markets master agreements’, where countries have responded to past findings to align with best practice. The index is becoming a powerful barometer for policy-makers and playing a role in building an Africa which can fund itself.’

‘As a business with strong pan-African aspirations, we are constantly trying to find ways to facilitate and encourage progress in the region. We are excited about the impact the index is having on African financial markets. We believe in the power of thought leadership and insights to help strengthen the region and build stronger and more robust financial markets,’ says Charles Russon, chief executive officer at Absa Corporate and Investment Banking.

The improvements outlined in the third Absa Africa Financial Markets Index underline significant progress across Africa’s financial markets. The first edition in 2017 shed light on the disadvantages of rigid foreign exchange regimes, which handicapped investors and constrained countries’ ability to deal with global developments. Subsequently, many countries have moved to more flexible exchange rates, improving their policy responsiveness and shock absorption capability. Similar positive changes can be seen in the growing consciousness of the importance of local investors and improvements in the transparency and availability of market data.

‘We welcome these vital signs of improvement in several African countries,’ says David Marsh, chairman of OMFIF. ‘New products like the world’s first sovereign blue bond issued by Seychelles, or regulatory improvements in Mauritius and Ghana, prove that the African continent is moving in the right direction. The index is now a piece of important evidence for tracking progress in the region.'

‘The Africa Financial Markets Index has helped our country design its reform plans to promote macroeconomic stability,’ says Akiules Neto, executive director and board member at the Angola Securities Exchange.

The 20 countries covered by the index are Angola, Botswana, Cameroon, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Tanzania, Uganda and Zambia.

The index evaluates countries across six pillars: market depth; access to foreign exchange; market transparency tax and regulatory environment and market transparency; capacity of local investors; macroeconomic opportunity; and legality and enforceability of standard financial markets master agreements.

In addition to quantitative analysis, OMFIF gained further insights by surveying more than 40 policymakers and top executives from financial institutions operating across the 20 countries, including banks, investors, securities exchanges, central banks, regulators, audit and accounting firms and international financial and development institutions.

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : Financial markets in Africa are increasingly supportive of investment


25 October 2019 11:32 AM
Tags:
Zambia
Ethiopia
Kenya
Egypt
Nigeria
Tanzania
Africa
Rwanda
Angola
Ghana
South Africa
Mozambique
Cameroon
Ivory Coast
Morocco
Uganda
Mauritius
Namibia
Botswana
Absa
Senegal
Seychelles
Absa Africa Financial Markets Index
OMFIF
George Asante
Charles Russon
David Marsh
Akiules Neto
Angola Securities Exchange

More from Business

181106 DAN PLATO 3

'It's all systems go to end load shedding nightmare' - Plato on IPP announcement

15 February 2020 11:55 AM

Cape Town Mayor Dan Plato says City awaiting further clarity, but is "delighted" at Ramaphosa's IPP announcement during Sona.

Share this:
Read More arrow_forward

dagga-weed-hemp-farmer-plant-farming123rfjpg

How to ensure SA's soon-to-be regulated hemp industry will thrive

15 February 2020 10:18 AM

Tony Budden (Hemporium) responds to Ramaphosa's Sona announcement - SA has to play catch-up, learn from global best practise.

Share this:
Read More arrow_forward

broken-heart-broke-money-coins-finances-love-relationship-divorce-break-up-123rf

How much should couples know about each others' money?

14 February 2020 2:35 PM

For most people, it's not easy to talk about money with a partner. Financial planner Sylvia Walker has advice.

Share this:
Read More arrow_forward

SAA

Labour Court subverted workers’ rights! Our members are taxpayers too! – Numsa

14 February 2020 1:06 PM

The Labour Court has thrown out a union bid to stop retrenchments at SAA. Clement Manyathela talks to Numsa's Phakamile Hlubi.

Share this:
Read More arrow_forward

refilwe-moloto-capetalkjpg

I don't think SA is ready for a Sovereign Wealth Fund, says Refilwe

14 February 2020 10:10 AM

Refilwe Moloto feels quite strongly that how and where SA is going to get this national endowment hasn't been thought through.

Share this:
Read More arrow_forward

cyril-sona-2-2020jpg

'Broadly, it was a much better speech than we’ve heard to date'

14 February 2020 9:51 AM

The President's speech was detailed and acknowledged our sense of despair, says EWN parliamentary correspondent Gaye Davis.

Share this:
Read More arrow_forward

nedbank-thjpg

Nedbank CEO: No bank accounts at risk in data breach

13 February 2020 1:08 PM

Nedbank says account holders to be notified within 3 days whether their data compromised. Up to 1.7m clients could be affected.

Share this:
Read More arrow_forward

lays-salt-vinegarjpeg

Why you have to lay off the Salt (& Vinegar)

13 February 2020 12:56 PM

Chris Moerdyk says Lay's discontinuation of classic flavour is a business decision. And anyway, any publicity is good publicity.

Share this:
Read More arrow_forward

Donald Trump in a nappy on a nuclear bomb

'Is Donald Trump going to bomb South Africa if we don’t take their chicken?'

13 February 2020 12:30 PM

Despite reality, SA is no longer a developing country, says the US. Refilwe Moloto interviews Lebohang Pheko (Trade Collective).

Share this:
Read More arrow_forward

apple-orchard-farm-treesjpg

'Former landowner still liable for debt on land that Govt takes without paying'

13 February 2020 10:41 AM

If EWC isn’t executed wisely it may have the unintended consequence of breaking the financial system, warns Busa.

Share this:
Read More arrow_forward

More from Africa

Teenagers gossiping friendship 123rflifestyle 123rf

'US religious fundamentalists target South African woman seeking abortion'

12 February 2020 11:29 AM

Powerful US activists tied to the Trump administration are manipulating women and girls on a massive scale, says Kerry Cullinan.

Share this:
Read More arrow_forward

history-for-the-future-capetalk-feature-thumbnailpng

Rivonia Trialist, Andrew Mlangeni: More than just a prestigious 'Backroom Boy'

11 February 2020 11:05 AM

To mark 30 years since Nelson Mandela was released from prison, Pippa Green speaks to Rivonia Trialist, Andrew Mlangeni.

Share this:
Read More arrow_forward

namibian-hardwood-forests-plundered-john-grobler-facebookjpg

Syndicates involved in Namibian hardwood plunder claims investigative journalist

11 February 2020 11:00 AM

Environmental investigative journo John Grobler explains the difference between hardwood and braai wood from Namibia.

Share this:
Read More arrow_forward

eqqbgmnxkaewh5bjfif

'Hope that Ramaphosa will breathe new life into Africa's Peer Review Mechanism'

9 February 2020 2:00 PM

Liesl Louw-Vaudran (ISS) is at the Addis Ababa summit where Ramaphosa assumed the AU chairmanship and was elected APRM chair.

Share this:
Read More arrow_forward

Baby pangolin Menina

Why three pangolin species have moved closer to extinction

30 January 2020 4:40 PM

Humans are the only real predators that pangolins face, says wildlife specialist Nicci Wright.

Share this:
Read More arrow_forward

Lagos Nigeria Motorcylce Taxi Okada

Lagos – a chaotic city of 20 million - bans 'scary, menacing' motorcycle taxis

29 January 2020 12:54 PM

The drivers are saying, “This is how we make a living! This is how we feed our families! What are you proposing we do?”

Share this:
Read More arrow_forward

vanessa-nakate-facebookjpg

Ugandan climate activist accuses media of racism after Davos photo crop

25 January 2020 11:54 AM

WEF youth climate delegate Vanessa Nakate was cropped out of a group pic with her white peers, also featuring Greta Thunberg.

Share this:
Read More arrow_forward

37bf0912-feaf-45c6-a91d-7d6f973ae058.jpg

Coronavirus: 'SA has all necessary systems in place to identify, isolate cases'

25 January 2020 10:12 AM

The global number of infections from the 'China virus' now tops 1,300. The NICD's Cheryl Cohen details measures to protect SA.

Share this:
Read More arrow_forward

Isabel dos Santos

'Africa’s richest woman stole hundreds of millions of dollars from her country'

21 January 2020 11:49 AM

A trove of 715 000 files prove that Isabel dos Santos syphoned a breathtaking fortune into offshore accounts, says the ICIJ.

Share this:
Read More arrow_forward

education-africa-girl-child-literacy-school-learning-knowledge-teaching-123rf

'22 richest men have more money than all 600 million African women put together'

21 January 2020 10:59 AM

If Jeff Bezos and Bernard Arnault – the world’s two richest men – sat on their wealth piled up in $100 bills, they’d be in space!

Share this:
Read More arrow_forward