The year 2025 saw significant changes in the trade policies imposed by major global economies, as well as huge decreases in foreign aid disbursements, which transformed Africa’s financial environment.
This combination of events caused significant shifts in financial markets for low-income countries, notably those on the African continent that rely largely on international development assistance.
However, few African economies have stayed robust in the face of hostile trade policies, creating a favorable environment for efficient markets.
Absa reported that only ten African countries’ financial markets have improved.
The report, dubbed ‘The Absa Africa Financial Markets Index,’ has analyzed financial market development across the continent over the past nine years using the criteria of transparency, accessibility, and openness.
The 2025 analysis compares Africa’s financial performance to the impact of measures like Donald Trump’s trade policies, which include significantly higher trade tariffs.
As a result, while the outcomes appear bad, the report’s comprehensive indicators show that Africa as a whole is making progress, particularly in product diversification, foreign exchange policy reforms, and climate change measures.
“On a headline basis, the last year may feel like a bit of a disappointment. Just 10 of the 29 countries in the 2025 index saw their overall scores improve,” the report states.
“But the detail shows that progress continues to be made across the region, particularly in foreign exchange reforms, improved product diversity, and action on climate change,” it adds.
A fundamental, and possibly most effective, option for minimizing the impact of these unanticipated external forces is to cultivate a much more stable currency environment across African nations.
Ahmed Attout, the African Development Bank’s director of financial sector development, emphasized this issue, saying, “Long-term local currency financing is key to economic development.”
He went on to say, “When the financial sector mobilizes domestic resources and allocates them efficiently, everyone benefits: individuals have more options for savings and investments, and the private sector and governments can fund their investment needs.”
Countries with strong internal capital markets are better able to withstand external shocks such as currency volatility and global interest rate hikes.”
Having said that, below are the African countries with the best developed financial markets, according to Absa’s market index.
