Kenya’s financial space has been ranked the third most advanced in the continent according to the 2018 Absa Africa Financial Markets Index (AFMI), which is now its second edition.
Kenya was ranked number one when it comes to access to foreign exchange and has a general score of 65% and ranks after Botswana which has a score of 65%. South Africa, with a score of 93%, was declared the most advanced market in Africa.
Kenya’s maturity as a market through the ability to enforce financial agreements, clarity on property rights and compatibility with international standards helped it improve its position among African countries.
“Areas of improvement for Kenya include limited product diversity, relatively low pension assets per capita and declining export market share.” reads the report in part.
East Africa
Uganda was rated the second-most progressive market after Kenya with a score of 50%, due to its stable performance with good foreign exchange access but low local investor capacity. It was closely followed by Rwanda, with a score of 49% which dropped three positions to position 11 due to discrepancies between strong official rules on transparency and reality of implementation. Tanzania (43%) also dropped four positions to 15th due to lack of capacity of local investors.
And just like last year, out of the 20 economies, Ethiopia has the most underdeveloped financial system because it lacks a security exchange and has no corporate bond market.
Across Africa
Nigeria’s score improved on the back of improved policies meant to strengthen the capacity of local investors. On the other hand, Mauritius and Namibia scores deteriorated across the six pillars despite being ranked among the top performers.
The survey by the Official Monetary and Financial Institutions Forum (OMFIF) assesses progress and potential across six key pillars:
6 fundamental pillars of the #AFMI2018
~ Market depth
~ Access to foreign exchange
~ Market transparency, tax and regulatory environment
~ Capacity of local investors
~ Macroeconomic opportunity
~ Legality & enforceability of standard financial markets master agreements— Kenyanwallstreet (@kenyanwalstreet) October 24, 2018
The survey was commissioned by Absa Group in the course of last year and examined 20 African markets, up from 17 the previous year, extending coverage to three additional countries – Angola, Cameroon and Senegal.
