This archive report was first published on 18 October 2021.
Published on October 18, 2021, the Absa Africa Financial Markets Index 2021 ranked Kenya's financial market attractiveness at 11th position in Africa, a decline from 7th in 2020 and 3rd in 2019.
South Africa, Mauritius, and Nigeria retained the top three positions in the index, despite having lower overall scores than last year. The index is produced by the Official Monetary and Financial Institutions Forum (OMFIF) in association with Absa Group.
Kenya scored 46 points out of 100 on the Market Depth Pillar, 45 points on the Access to Foreign Exchange Pillar, 70 points on the Market Transparency, Tax and Regulatory Environment, 24 points on the Capacity of Local Investors Pillar, 62 points out of 100 on the Macroeconomic Opportunity Pillar, and 28 points out of 100 for the Enforceability of Standard Master Agreements Pillar.
Kenya and Morocco scored highest in the Market Depth Pillar for having green or sustainable bonds, equities, and mutual funds in their markets. Kenya has also issued ethical securities to fund socially responsible investment opportunities.
In the 2020/21 period, Kenya raised $740 million through the issuance of a 21-year infrastructure bond. The country is also expected to start the user-testing phase for its upgraded central securities depository, which is expected to go live in April 2021.
The revised CSD will address challenges around horizontal repurchase agreements and allow repos of government securities to go through a fully automated process, contributing significantly to deepening the secondary market in these sovereign asset classes.
Central banks in several index countries, including Ghana, Kenya, and Rwanda, are researching the potential benefits of Central Bank Digital Currencies (CBDC) in promoting payments system efficiency and stability, fostering competition in the financial sector, and boosting economic growth.
