New index rates Kenya's financial markets ahead of East African peers; 5th on the continent.
17 January 2018
A survey of the stock markets of 17 African countries by Barclays Africa Group has rated Kenya’s financial markets the most advanced in the East African region and 5th with a score of 59% in the continent ahead of economic giants like Nigeria (53 %,) Ghana (49%) and Egypt (39%). South Africa with a score of 92% was ranked first.
The Africa Financial Markets Index (AFMI) advocates for the expansion and deepening of financial markets across the continent. The Index measures six pillars namely: depth and breadth per instrument or product that can be traded; access to foreign exchange; market transparency, tax and regulations; macro economic opportunity; legality and enforceability. The index measured and tracked 40 indicators across the six pillars.
“The Index provides countries with valuable insights and tools to improve the state of their financial markets,” said Jeremy Awori, Managing Director, Barclays Bank of Kenya. “By broadening and deepening their understanding of the requirements of local and international investors, Africa’s leaders can develop robust markets – a prime condition for sustainable, inclusive growth,” he added.
Kenya scored the highest ranking in East Africa attributed to its strong contract enforcement policies, market depth as well as the capacity of local investors, ahead of Uganda, Tanzania, Rwanda and Ethiopia.
It outpaced its East African peers in the market depth pillar, which focussed on areas such as the range of financial products, currencies and hedging options available and capacity of local investors’ parameters. It also emerged top in East Africa and 3rd on the continent with a score of 81% behind South Africa (100%) and Mauritius (93%).
The survey however challenged Kenya to improve on areas such as low historical growth in export market share, low GDP per capita and relatively small market capitalization.
“Improving the regulatory and policy environment is a prerequisite for attracting foreign capital,” said Mr. Asante. “The inaugural Barclays Africa Group Financial Markets Index is an important barometer measuring the progress and potential of Africa’s financial markets.”
“African financial markets have traditionally suffered from a lack of depth relative to other regions,” said George Asante, the Barclays Managing Director and Head of Markets (Africa ex. SA). “This”, he added, “has been a key factor holding back the ability of firms and investors within and beyond the continent to exploit expansion opportunities.”
The Barclays Africa Group Financial Markets Index was produced by the Official Monetary and Financial Institutions Forum (OMFIF) in association with Barclays Africa Group Ltd in the course of last year.
The Index ranked the maturity, openness and accessibility of the 17 financial markets in Africa, based on both qualitative and quantitative criteria. Development of local investor capacity and ability to attract foreign capital were also key points of focus.
Institutions surveyed emphasized the importance of increasing small and medium-sized enterprises’ access to financial markets, including through dedicated market segments, as a vital means of deepening markets.
“While many African countries are implementing a growing number of national policy frameworks for market development, there are still several challenges such as limitations on the range of assets available for local investors,” said Jeremy Awori, the Barclays Kenya managing director.
About Barclays Bank of Kenya
Barclays Bank of Kenya is one of Kenya’s leading financial institutions. Established in 1916, Barclays has been a major player in Kenya’s financial landscape engaged in personal banking, Enterprise, credit cards, corporate and Bancassurance. The bank offers end to end financial solutions to retail, enterprise and corporate customers and its regional and global footprint enables it to offer cutting edge financial solutions to its clients. The bank is a leader in the credit card space. It has also been associated with a number of market firsts including the launch of the first ATM, Sharia Banking and unsecured lending.
For further information, visit www.barclays.co.ke
About Barclays Africa Group
Barclays Africa Group Limited (“Barclays Africa” or “the Group”) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest financial services groups.
Barclays Africa offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management and insurance.
The Group operates in 12 countries with approximately 40,000 employees, serving close to 12 million customers.
The Group registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa), Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.
For further information about Barclays Africa, please visit www.barclaysafrica.com