Africa’s large and dynamic market presents opportunities for growth on the continent. However, foreign investment prospects are hampered by underdeveloped financial markets and a lack of legal and regulatory clarity. Liquidity, regulation, foreign exchange restrictions and policy choices are the highest area of concern for investors when considering Africa. Whereas product diversity and the speed of transactions are among the highest-performing indicators, the report highlights investor concern about the relevance of African markets on the global financial scene.
The Index, produced by OMFIF and sponsored by Barclays Africa Group, focuses on six fundamental pillars:
- Market depth
- Access to foreign exchange
- Market transparency and regulation
- Capacity of local investors
- Underlying macro opportunities
- The enforceability of international financial agreements
Key report findings
– The Index finds that South Africa, Mauritius and Botswana lead African countries by displaying openness for capital markets transactions and direct investment.
– Development in financial market depth is important for commodity exporters as they seek to diversify their economies to new sectors.
– Other countries are growing fast from a low base. Ethiopia has outperformed other countries in GDP growth prospects and is projected to grow fastest among the African countries studied in the report.
– The Index shares results of a survey conducted with 60 key institutions operating throughout Africa, accumulating their views on market conditions and the regulatory framework of the African economies covered in the report.