Africa's Markets Are Getting More Transparent: Report

Financial Markets across several African countries have seen significant improvements in the year 2018-19, says research conducted by OMFIF (Official Monetary and Financial Institutions Forum) and pan-African financial group Absa.

What Happened

OMFIF measures the countries’ financial markets based on market depth, access to foreign exchange, market transparency, tax and regulatory environment, the capacity of local investors, macroeconomic opportunity, and legality and enforceability of standard financial markets master agreements.

This is the third consecutive year that OMFIF has published its report. South Africa continues to outperform the rest of the countries on most yardsticks, but the gap is closing fast.

According to OMFIF, Egypt now offers better macroeconomic opportunities than South Africa.
All countries have made overall progress compared to 2017, when only three out of the 17 countries studied scored more than 50. In 2019, 13 out of the 20 countries on the list have crossed the halfway mark. The most significant progress can be seen in the market transparency, and tax and regulatory environments, where the average score has increased up to 67.

Jeff Gable, head of research at Absa, told CNBC that the index had prompted a collaborative approach by policymakers across listed countries.

Why It Matters 

Gable said that the goal of the index was to move away from the ‘traditional experience’ of African nations looking outside the continent for economic and market guidance.

“Singapore’s financial markets developed in this way, what should that tell me about how my financial markets develop in Botswana? That’s not always obvious, but Botswana might be able to learn from South Africa, South Africa can learn from Kenya, Kenya can learn from Ghana,” Gable added.