Zachary Ochuodho @zachuodho
Kenya ranked fifth with a score of 59 per cent ahead of the continent’s economic giants like Nigeria, Ghana and Egypt – which scored 53, 49 and 39 respectively in the Barclays Bank of Africa Financial Markets Index (AFBMI) released yesterday.
The index intends to drive conversations among policy-makers, investors, market participants and other partners to address gaps and track progress on an ongoing basis.
According to the report, South Africa emerged first with a score of 92 per cent. Kenya’s high ranking in East Africa was attributed to its strong contract enforcement policies, market depth as well as the capacity of local investors, ahead of Uganda, Tanzania, Rwanda and Ethiopia.
Speaking at the launch Capital Markets Authority (CMA) chief executive Paul Muthaura said addressing legal, infrastructural and low capacities of local investors to actively participate will be important for Africa.
“The publication of financial market data is critical to Africa’s ability to tap into local and global savings pools. Mobilising these resources will help accelerate productive investment that contributes to sustainable domestic employment creation and generates income to service the underlying debt,” Muthaura said.
In the survey, Kenya outdid its peers in the East Africa region mainly due to the market depth pillar, which focused on the availability of financial products, currencies and hedging and capacity of local investors’ parameters.
Barclays Africa head of marketing George Asante said the new index would help advocate for expansion and deepening of financial markets across the continent.
Asante said despite the high score, Kenya needs to improve on areas such as low historical growth in export market share, low Gross Domestic product per capita and relatively small market capitalisation.
“The Index provides countries with valuable insights and tools to improve the state of their financial markets,” said Barclays Bank Kenya managing director Jeremy Awori. He said Africa needs to develop local investor capacity and ability to attract foreign capital which were also key points of focus.