The Absa Africa Financial Markets Index (AFMI) is a valuable instrument for measuring African countries’ investment attractiveness. It assesses progress in capital market development and advises individual governments on how to attract international investment.
The majority of AFMI countries increased their scores for the second year in a row.Zimbabwe and Rwanda made the most progress, each gaining over two points. Climate risks have been incorporated into Zimbabwe’s financial stability regulation, while Rwanda is collaborating with multilateral organizations to develop market standards for green investments.
However, the index’s progress has not been consistent. Rising interest rates in industrialized economies have resulted in currency depreciation and capital outflows from a number of African countries.
Egypt has been hammered particularly severely, with its overall score dropping by three points. It is presently ranked outside of the top ten. South Africa, Nigeria, and Uganda all have lower overall scores, but they remain in the top five, along with Mauritius and Namibia.
According to the new methodology, only the top five countries have a score of more than 60. South Africa and Mauritius continue to be the only countries with scores above 70, as they have done since 2019. This indicates that there is still a lot of space for improvement across the continent.
| Rank (2023) | Country | Score 2023 | Score 2022 | Comments |
|---|---|---|---|---|
| 1 | South Africa | 88 | 89 | Lower pension assets in dollar terms weigh on score |
| 2 | Mauritius | 77 | 77 | Rise in sovereign and corporate credit ratings |
| 3 | Nigeria | 67 | 68 | Foreign exchange shortages and rising inflation reduce score |
| 4 | Uganda | 63 | 64 | Fall in FX reserves and liquidity |
| 5 | Namibia | 63 | 63 | Large pension assets but decline in fixed-income market |
| 6 | Botswana | 59 | 58 | New incentives for ESG asset issuance lift score |
| 7 | Kenya | 59 | 60 | Lower FX reserves and market liquidity |
| 8 | Morocco | 58 | 57 | New climate stress testing and higher FX liquidity |
| 9 | Ghana | 58 | 59 | Deterioration in FX reserves and price stability |
| 10 | Tanzania | 55 | 55 | Improved product diversity with sukuk bond issuance |