According to the 2019 edition of the Absa Financial Markets Index report, there are very high growth prospects for African economies.
The aim of the report is to show not just present position or economies with the highest growth but also show how economies can improve market frameworks in order to improve investor access and sustainable growth.
The report is based on six key pillars which include; market depth, access to foreign exchange, market transparency, the capacity of local investors, macroeconomic opportunity, and enforceability of standard financial market.
The report states that nine countries performed above average. These countries included South Africa, Mauritius, Kenya, Namibia, Botswana, Nigeria, Tanzania, Zambia and Rwanda. The countries whose performance improved the most since last year include Mauritius, Tanzania, Egypt, Namibia and Mozambique.
Mauritius’ market depth improved due to a substantial listing of bonds by the Central Bank. Egypt’s improved performance was attributed to its macro-economic environment. On the other hand, Ethiopia was one of the countries with the lowest scores and improvement is expected as it plans to launch a stock exchange in 2020.
Since the first edition of the Index was launched in 2017, the average mark of about 17 countries was 49.6 out of 100 points and only three African countries had scored above it thus indicating a lot of room for growth.
The index has since then expanded to accommodate three more countries and the average overall score across all the 20 countries was 52.7. Seychelles progressed the most since the launch of the first index. It scored 47 an improvement from its first score which was 29. This was attributed to the growing pool of its local assets.