Ghana has moved into the top five ranking in the Absa Africa Financial Market Index (AFMI) report.
The country placed fourth with an overall score of 62 out of the maximum 100 score – a recognition of the positive strides in the development of the Ghanaian market.
This is an improvement on last year’s sixth position with a score of 59.
Remarkably, the country scored 50 and above in five out of the six pillars measured.
The AFMI evaluates and ranks Financial Market development in 23 countries, highlighting the opportunities and challenges within the economies.
The aim is to show present positions, as well as how economies can improve market frameworks to bolster investor access and drive sustainable growth.
The index assesses countries according to six pillars: Market Depth; Access to Foreign Exchange; Market Transparency, Tax and Regulatory Environment; Capacity of Local Investors; Macroeconomic Opportunity; and Enforceability of Financial Contracts.
South Africa, Mauritius and Nigeria maintained their lead on the index despite recording lower overall scores compared to the previous year mainly due to the impact of COVID-19.
Ghana and Uganda entered the top five for the first time, both earning points especially for the progress in the enforceability of standard master agreements.
The policies and initiatives that contributed to Ghana’s improved performance include adoption of and enforceability of standard master agreements, improved access to foreign exchange through forward FX auctions by the Bank of Ghana and market transparency works through daily publication of financial asset prices.
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The country’s weakest link, however, was the capacity of local investors where it recorded a score of 21.
Markets Index
The Absa Africa Financial Markets Index is produced annually by the Official Monetary and Financial Institutions Forum (OMFIF) – an independent think tank for central banking, economic policy and public investment.
The index is produced through extensive quantitative research and data analysis in association with Absa Group Limited.
The index, now in its fifth year, throws light on Financial Markets across Africa and benefits from continued engagement with policymakers, regulators, market participants and industry experts; providing the latest information about developments in the region.
Economic development
Commenting on the report in a release issued in Accra yesterday, the Managing Director of Absa Ghana, Abena Osei-Poku, said expanding and deepening Ghana’s financial markets was vital to economic development.
She said it was therefore great to note that the country was moving in the right direction with recognisable progress.
Ghana’s strong performance across pillars with scores above 50 in five out of the six pillars shows that stakeholders, led by the Ministry of Finance and the Bank of Ghana, have sustained development initiatives through the Covid period,” she stated.
Quantum of work
The Director and Head of Global Markets of Absa Ghana and Nigeria, Kobla Nyaletey, said to score full marks of 100 on the pillar of enforceability of financial contracts signified the quantum and speed of work by stakeholders in the last few years in adopting measures to underpin financial market transactions.
