Fourth annual Absa-OMFIF report shows African markets face extreme test of resilience due to Covid-19


  • Average overall score dips to 51 out of 100 from 53 in 2019, partly due to slower market activity in the first half of 2020 and stricter scoring in some indicators.
  • Countries perform best in ‘market transparency, tax and regulatory environment’, scoring 67 on average.
  • South Africa and Mauritius maintain their lead in the index, scoring 89 and 79, respectively.
  • Namibia tops ‘capacity of local investors’, while Mauritius retains its lead in ‘legality and enforceability of standard financial markets master agreements’.
  • Green finance is gaining momentum, with Nigeria, Kenya and Egypt among countries that have issued sovereign green bonds in the past year.

Covid-19 has made the underlying structure and resilience of African financial markets a more important matter for domestic and international investors, as the continent grapples with returning to sustainable growth, the Absa Africa Financial Markets Index shows.

Now in its fourth year, the index, which is produced by OMFIF, has become a benchmark for the investment community to gauge countries’ performance across a range of indicators important for financial market development.

The index has expanded to 23 countries, up from 17 in the inaugural publication. The latest additions, Eswatini, Lesotho and Malawi, reflect mounting interest in the region’s potential as a source of growth and opportunity.

‘As an organisation with deep pan-African ties we are passionate about our contribution to the development of strong financial markets on the continent, the value of which has been highlighted by the challenges we are currently facing,’ said Daniel Mminele, group chief executive of Absa Group.

‘The Afmi report is a tool that helps to anchor policy discussions between regulators, exchanges, investors and corporates on how to promote open, accessible and transparent markets, which are necessary to mobilise capital and promote investment on the continent,’ Mminele added.


Key findings:
South Africa again tops the index by a wide margin, thanks to its deep capital and foreign exchange markets. Mauritius secures the runner-up position for the second year in a row, partly because of its alignment with internationally recognised legal frameworks. Nigeria, Botswana and Namibia round off the top five. Nigeria has relatively liquid markets, while Namibia and Botswana enjoy a high concentration of domestic assets from pension funds.

On average, countries’ scores in ‘market depth’ dropped by 0.6 from last year. The withdrawal of international capital impacted the region’s stock markets as liquidity dropped in the first half of the year, hampering countries’ performance in this pillar. This decline demonstrates the importance of deepening financial markets and encouraging local participation.

Countries’ scores in ‘legality and enforceability of standard financial markets master agreements’ deteriorated by an average of 8.1, reflecting a change in the basis for assessment introduced in this year’s edition.

Scoring for the enforcement on close-out netting rules is based on data and legal opinions from the International Securities and Derivatives Association, leading to significant changes in the marks of some countries, including Kenya, Tanzania, Namibia, Angola and Botswana.

Although the pandemic disrupted markets, it has presented opportunities for capital market development. The African Development Bank issued coronabonds in March to help finance Covid-19 response measures.

Other sustainability initiatives are gaining momentum, especially in green finance. Nigeria, Kenya and Egypt are among countries that have issued sovereign green bonds in the past year. Rwanda is establishing a green investment bank, while Uganda plans to develop a fund for post-disaster environmental restoration.

‘Worldwide, investors are urging African countries to step up efforts to improve their financial market structures as a crucial means of returning to sustainable growth. The index tracks these developments and provides clear benchmarks for progress,’ said David Marsh, chairman of OMFIF. ‘African counties can help each other by learning best practice from each other – and then implementing it.’


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