The Absa Group, in association with the Official Monetary and Financial Institutions Forum (OMFIF) think thank, recently released its Absa Africa Financial Markets Index 2022 report, evaluating the 26 most developed financial markets in Africa.
The report highlights economies with the most supportive environment for effective markets. The aim is to show present positions, as well as how economies can improve market frameworks to bolster investor access and sustainable growth. The index assesses countries according to six pillars: market depth; access to foreign exchange; market transparency, tax, and regulatory environment; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts.
Even as challenging market conditions weighed on performance in the index, 19 of the 26 countries improved their scores relative to last year, according to the report. This was largely due to broad-based progress in developing sustainable financial markets, which is becoming increasingly important to global investors.
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The report noted that Namibia, Uganda, and Kenya are among the countries with the greatest increase in scores. They have bolstered their environmental, social, and governance market frameworks, and, in Kenya, climate risks have been incorporated into financial stability regulation. Greater product diversity has also lifted scores for most countries, including Angola and Lesotho, which both issued their first initial public offerings over the past year.
Further findings from the report showed that South Africa, Mauritius, and Nigeria maintain their positions in the top three this year, as they continue to score highly on measures of market depth, transparency, and enforceability of legal agreements. You can donwload the report with the 26 most developed financial markets in Africa here.