Page 7 - AI MAG NEW TEST EXPORT

FINANCIAL MARKETS
INDEX

Botswana, Kenya and Nigeria have moved up the Absa Africa Financial Markets Index, produced by
the Official Monetary and Financial Institutions Forum, and South Africa remains in top position,
supported by strong financial market infrastructure and a robust legal framework.

However, South Africa’s macroeconomic performance has regulatory frameworks across Africa and we look forward to
deteriorated over the past year. Notably, the country no longer tracking progress annually.’
tops the index across all six pillars as it did in 2017, having been
overtaken by Kenya on ‘access to foreign exchange’ and by This year’s edition extends coverage to three additional countries
Nigeria in ‘market transparency, tax and regulatory environment’. – Angola, Cameroon and Senegal – and pays special attention
Nigeria is a new entrant to the top five, as a result of Namibia to policies for enhancing market growth, including financial
falling to sixth place from fourth this year. inclusion and investor education. Countries are progressing
with policies that support the development of financial markets
The five highest ranked financial markets in the 2018 index are: across the continent. South Africa’s ‘twin peaks’ strategy for
South Africa, which remains in the top position; Botswana, which improving financial regulation and Mozambique’s ‘financial
rose to second place from third last year; Kenya, which climbed sector development strategy’ stand out among the frameworks
two spots on improved access to foreign exchange; Mauritius, introduced over the past year. Such initiatives have boosted
which moved down to the fourth place from second last year; performance for the index as a whole.
and Nigeria, owing to improvements in administrative efficiency
and tax incentives that have boosted the country’s regulatory The greatest area for improvement across the continent
environment. remains the ‘capacity of local investors’. Excluding the top five
economies, the remaining countries average a score of just 22
Now in its second year, the index is a premier indicator of out of 100 in this pillar. Survey respondents highlighted that the
the attractiveness of Africa’s financial markets, for use by lack of knowledge and expertise of pension fund trustees and
governments, investors and asset managers around the world. other asset owners hinders the development of new financial
‘The second edition of the Absa Africa Financial Markets Index products, by reducing their demand for more sophisticated
draws attention to the considerable investment opportunities and assets and strategies to diversify returns. The index also shows
untapped market potential of countries across the continent,’ that improvements in market infrastructure and regulatory
says Akinwumi Adesina, president of the African Development frameworks could boost the performance of countries in the
Bank, in a foreword to the report. middle of the index over coming years.
‘The development of well regulated, deep and liquid financial
markets is a key priority that should be at the top of Africa’s
development agenda. The index facilitates a meaningful debate
about the maturity and accessibility of Africa’s financial markets.
It is an important contribution that supports policy-makers,
investors, regulators and other market participants to identify
the areas and initiatives which will drive the most significant
improvements,’ says Maria Ramos, chief executive officer of
Absa Group.
‘It is heartening to see the advances made by African countries,
in many areas, to improve the efficiency of capital markets,’ says
David Marsh, chairman of OMFIF. ‘However, more remains to
be done regarding the robustness of market infrastructure and