Kenya has been ranked as the third most advanced financial market in Africa and among the continent’s most innovative countries due to its sovereign bond listing that enhance the asset pool.
According to the report by Absa Group, the index scores each country based on six pillars:
- Market Depth
- Access to Foreign Exchange
- Market Transparency
- Tax and Regulatory Environment
- Capacity for Local Investors
- Underlying Macro Opportunity
- Legality and Enforceability of Standard Financial Markets Master Agreements
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Join our Introduction to Cryptocurrencies Class – 2nd, November 2019The index the top 5 African countries as follows:
- South Africa – Deep market liquidity anchored by strong domestic investors
- Mauritius – Sizeable pool of investible pension assets with strong legal framework
- Kenya – Sovereign bond listings enhance asset pool
- Namibia – Wide range of financial products available but low market turnover
- Botswana – Drop in pension assets reduces local investor capacity
Among other countries that were highlighted in the report include Nigeria which dropped in ranking due to its multiple exchange rate reporting which has weakened robust performance across pillars and Ghana which offers an attractive tax environment but low wholesale foreign exchange market turnover.
South Africa has retained the top position from 2018 index due to its impressive market depth, market transparency, tax, and conducive regulatory environment.
When it comes to favorable financial regulation, the top 7 countries were ranked as follows:
- South Africa
- Mauritius
- Nigeria
- Rwanda
- Ghana
- Botswana
- Zambia
The countries outperformed the rest in specific areas:
- South Africa – It has the largest market capitalization which is triple the size of its economy followed by Botswana with 204% of its GDP
- Ghana – Received a near-perfect score for its tax regime which is broadly viewed as favorable
- Egypt – Outperforms all other African countries in both economic and expert growth
- Mauritius – Takes the top African top spot for having a strong insolvency regime with widely recognized internationally-accepted and enforceable master agreements
Other highlights from the report included:
- Seychelles issues the world’s first sovereign blue bond
- Mauritius established a multi-commodity spot and derivatives trading platform and clearing house
- The Johannesburg Stock Exchange launched a Nasdaq clearing platform for equity and currency derivatives markets
- 400% over-subscription of Nigeria’s first 30-year government bond issued earlier in 2019
- Ethiopia announced plans to launch a stock exchange by 2020
- The Dar-Es Salaam Stock Exchange named a full member of the World Federation of Exchanges
The new report reaffirms earlier studies which show that South Africa, Mauritius, and Nigeria as among the top African countries that offer favorable regulation in the blockchain and crypto space and are likely to continue becoming the preferred destinations for these investments.
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