Africa financial markets recover

Absa Group recently unveiled its fifth African Financial Markets Index, shedding light on the state of financial markets across the continent. The index reflects the impact of various factors on market development, including the incorporation of ESG (Environmental, Social, and Governance) metrics. In a recent interview with CNBC Africa, Anthony Kirui, Head of Markets at Absa Bank Kenya, shared insights on the key findings of the index and the implications for Africa's financial markets. Kirui highlighted that the inclusion of ESG factors had lowered scores for 19 out of the 23 countries assessed, signaling a critical need for improvement in this area. Despite the challenges posed by the pandemic, some countries such as Kenya and Morocco exhibited strong performance in the index, surpassing expectations. Kirui emphasized the importance of proactive measures taken by countries like Tanzania and Angola to enhance market visibility and reporting standards. The adoption of international financial reporting standards by countries like Mozambique further contributed to market development. However, Kirui underscored the need for greater focus on ESG policies, noting that only 13 countries out of 23 have such regulations in place. He expressed optimism about the potential for sustainable finance products to emerge as more countries prioritize ESG considerations. The index also highlighted Nigeria's lead in market transparency, tax, and regulatory environment, a position attributed to strategic initiatives by the securities exchange commission and improvements in securities lending frameworks. Kirui acknowledged the importance of addressing market depth for sustainable market growth, citing the essential role of local investors in offsetting foreign investment declines. Despite the challenges faced by African financial markets, the index serves as a valuable tool for identifying areas of improvement and driving future development.