Africa's Financial Markets See Fastest Growth in Seven Years
TLDR
- Africa's financial markets experience rapid growth, driven by economic recovery and reduced inflation, as per Absa Group's Africa Financial Markets Index.
- 23 out of 29 countries in the report improved their scores, showcasing strengthened pension fund assets and better access to global capital markets.
- Top performers include South Africa, Mauritius, Nigeria, Uganda, and Namibia, with growth in Botswana's ranking and shifts in Ghana, Kenya, Morocco, and Zambia positions.
Africa's financial markets are expanding at their fastest pace in seven years, driven by a recovery in economic growth and easing inflation, according to Absa Group's latest Africa Financial Markets Index.
Out of the 29 countries covered in the report, 23 improved their scores from last year, bolstered by growing pension fund assets, enhanced foreign exchange reserves, and selective restoration of access to global capital markets. The top five performers remained South Africa, Mauritius, Nigeria, Uganda, and Namibia.
Botswana moved up to sixth place, while Ghana dropped to seventh, and Kenya, Morocco, and Zambia closed out the top 10. Egypt held its position at number 11, with Ethiopia ranked last. "This is a welcome respite after several difficult years during which the continent faced challenges from the global Covid-19 pandemic, followed by higher inflation and financing costs," said Absa's interim Chief Executive Officer, Charles Russon.
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Key Takeaways
Last year, African markets struggled under high interest rates, weakened regional currencies, and the ongoing impact of Russia's invasion of Ukraine. However, the International Monetary Fund (IMF) forecasts sub-Saharan African economies to grow at 3.6% in 2024 and accelerate to 4.2% in 2025. The report highlights improved securities market activity and greater transparency in Egypt, Ethiopia, and Nigeria as they transitioned to freely floating exchange rate regimes.
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