Barclays Africa Group Financial Markets Index 2017
BARCLAYS AFRICA GROUP LAUNCHES NEW INDEX TO TRACK CONTINENT’S FINANCIAL MARKETS
by OMFIF and Barclays Africa Group in Washington
Wed 11 Oct 2017
Expansion of financial markets key for the next stage of African development, according to the Africa Financial Markets Index
13 October 2017: Africa’s large, youthful and dynamic markets present opportunities for growth on the continent. However, foreign and local investment prospects are hampered by several factors, including underdeveloped financial markets and unclear legal and regulatory frameworks. These are some of the conclusions drawn from the Africa Financial Markets Index - a newly released index produced by think tank OMFIF and sponsored by Barclays Africa Group Limited (BAGL).
The Index assesses the level of maturity, openness and accessibility of 17 financial markets in Africa and ranks them from the strongest to the weakest. It focuses on six fundamental pillars for financial market performance which are:
- market depth,
- access to foreign exchange,
- market transparency and regulation,
- capacity of local investors,
- underlying macro opportunities, and
- enforceability of international financial agreements.
The markets surveyed are; Botswana, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Tanzania, Uganda and Zambia.
According to the Index, the greatest constraint is the low capacity of local investors needed to drive the growth of the financial markets. Respondents in the survey also believe that increasing the range of assets for local investors, as well as boosting product education is key to developing Africa’s financial markets.
Ethiopia shows the highest GDP growth prospects and is projected to grow the fastest among the African countries studied in the report. The Index rates South Africa, Mauritius and Botswana well ahead of other African countries in displaying openness for financial market transactions and direct investment. Several of the other countries evaluated are growing fast albeit from a low base.
The Index shares results of a survey conducted with over 60 key African institutions drawn from banks, regulators, global consultancies and securities exchanges operating across the continent. The combined views, insights, market conditions and regulatory frameworks of the African economies are covered in the report and applied to the rankings.
“Liquidity, regulation, foreign exchange restrictions and policy choices are the highest area of concern for investors when considering Africa. Though product diversity and the speed of transactions are among the highest-performing indicators, our survey highlights investor concern about the relevance, with respect to asset allocation, of African markets in the global financial scene,” says David Marsh, Managing Director, OMFIF.
“The Index provides countries with valuable insights and tools to improve the state of their financial markets. By broadening and deepening their understanding of their strengths, challenges and areas of investor interest, leaders can increasingly develop robust markets – the goal of every country operating across the continent,” says Maria Ramos, Chief Executive, BAGL.
The index can be accessed on: https://thinktank.omfif.org/afmi2017
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