Dr. Maxwell Opoku-Afari
GHANA RECORDED the highest jump in both rank and score in the 2020 Absa Africa Financial Markets Index (AFMI) which is independently produced by the Official Monetary and Financial Institutions Forum (OMFIF).
With an improved score of 59 points, the 2020 index ranked Ghana’s financial markets attractiveness at sixth compared to the 2019 edition where the country placed 13th with a score of 50 points. The improvement was as a result of the country’s robust enforcement of rules and regulations in the financial market.
“The countries whose standing improved the most from last year are Ghana, Morocco and Seychelles. Firmer rules enforcing close-out netting boosted Ghana’s standing,” the report indicated.
The Absa Africa Financial Markets Index evaluates financial market development in 23 countries, and highlights economies with the most supportive environment for effective markets. The aim is to show present positions, as well as how economies can improve market frameworks to bolster investor access and 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, collateral positions and insolvency frameworks.
Ghana was ahead of notable economies such as Morocco, Egypt, Kenya and Rwanda.
Speaking at the launch of the index, the First Deputy Governor of the Bank of Ghana (BoG), Dr. Maxwell Opoku-Afari, noted that the AFMI, which is in its fourth year, had become an important tool that gave regulators a sense of progress made in the African financial markets.
According to Dr. Opoku-Afari, the Index confirmed that the reforms undertaken by the BoG was yielding positive results in the country’s financial markets.
“We are pleased that these reform measures are beginning to yield positive results in the money market as seen in increased volumes of interbank repo trading and general decline in overnight repos grades,” said Dr. Opoku-Afari.
“We are happy that Ghana’s ranking in the 2020 Absa Africa Financial Markets Index has seen the most improvement among all the surveyed countries. This spurs us on to do more,” added Dr. Opoku-Afari
The deputy governor indicated that the central bank would be rolling out new reforms to further strengthen Ghana as a trading hub to push the African Continental Free Trade Agreement agenda.
In her remarks, Managing Director of Absa Bank Ghana, Abena Osei-Poku, indicated that as a systemically important bank, Absa continued to play a significant role in promoting economic development and sustainable growth to help transform and prepare Ghana for a brighter future.
“The significant investments we have made in partnership with OMFIF, and the investments we continue to make are premised on our firm commitment to remain a force for good in Ghana and on the entire African continent,” noted Mrs Osei-Poku.
Explaining Ghana’s ranking on the index, Mr. Kobla Nyaletey, Head of Global Markets, Ghana & Nigeria, Absa Bank, said Ghana had shown a consistent trajectory of improvement since the inception of the index four years ago.
“The 2020 index shows that Ghana’s improvement was a result of active foreign exchange market and stronger legal framework.
“Ghana rose the most in Pillar 2: Access to foreign exchange with its foreign exchange liquidity increasing, as measured by interbank foreign exchange turnover,” Mr. Nyaletey added.
According to Mr. Nyaletey, the Absa Africa Financial Markets Index has become a benchmark for the investment community and Africa generally to gauge countries’ performance across a host of indicators important for financial market development.