Uganda ranked 5th in Absa Africa Financial Markets Index 2021

Kampala, Uganda | THE INDEPENDENT & XINHUA | Uganda is now ranked fifth with a score of 57 out of 23 countries surveyed in the Africa Financial Markets Index (AFMI) 2021.

The Absa Group survey, released in Kampala on Wednesday, indicates that Uganda was up from 10th position in comparison to the survey done in 2020. (See all rankings bottom)

In a presentation at a dialogue that followed the AFMI survey launch, Uganda’s Secretary to the Treasury Ramathan Ggoobi said the country is capable of even doing better. (Click to read full report AFMI_INDEX_2021)

“The depth and liquidity of capital markets is fundamental to supporting economic growth, creating investment opportunities and attracting foreign and local capitals. I’m optimistic about Uganda’s economic recovery. With the reforms we have embarked on, we will prosper in the medium term,” Ggoobi said.

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.

Ghana and Uganda entered the top five for the first time both earning points for progress, the survey said. South Africa, Mauritius and Nigeria maintain their lead in the index, though with scores slipping in 2021 for all three.

In the East Africa region, Uganda ranked number one followed by Kenya with a score of 47, Tanzania came third with a score of 45, followed by Rwanda with 43 and Ethiopia 25.

The average scores declined to 46.4 from 50.8 last year, with only seven countries earning above 50. Malawi, Egypt and Uganda are among the countries that improved their ranking the most, according to the survey.

Out of 23 countries in the index, 19 scored lower than last year.

MD Absa Uganda Mumba Kalifungwa said the bank appreciated all policy markers, regulators and market practitioners whose input through various consultations was essential to the findings presented under the index.

“Over the last 5 years, we have hosted an economic forum to present the findings of the report and also facilitate meaningful deliberations with key players from the government, private sector and business community focused on strengthening our financial markets,” he said.

We are starting to see lots of tension points in the markets, caused by global challenges, complicating supply chains of global markets. #AFMIndex2021 pic.twitter.com/sJHkMFamgv

— Absa Bank Uganda (@AbsaUganda) March 9, 2022

Uganda scored high on Pillar 3 Africa financial markets index; Implementation of financial reporting standards. Requires listed foreign & domestic public companies & MSMEs to report as per the IFRS @AbsaUganda @ntvuganda #AFMIndex2021 pic.twitter.com/IPkcxYc9gR

— Malcolm Musiime (@MalcolmMusiime) March 9, 2022

@Ochungochwa, our Head of Financial Markets and Executive Director.
As a country, we have one for the highest scores for fully implementing International Financial Reporting standards. The harmonized score was impacted by changes in other countries. #AFMIndex2021 pic.twitter.com/Qrm117xhuB

— Absa Bank Uganda (@AbsaUganda) March 9, 2022

Michael Atingi-Ego, deputy governor of the country’s central bank, Bank of Uganda, while giving his keynote address at the launch of the survey said despite the effects of the pandemic, Uganda managed to perform well.

Atingi-Ego said the ranking shows that there is need to sustain good policies and strategies that will power the financial market to drive economic growth and socio-economic transformation.

“Targeting the top of the index is symbolic of our determination to nudge, push and incentivize the fuller development of our financial markets. Effective and efficient financial markets in an open, transparent, and progressive economic environment will sustain and broaden our capacity to attract global capital, promote the effective use of domestic resources, increase resilience to economic shocks, and stimulate the economic recovery that remains fragile partly due to subdued investment,” he said.

Geff Gable, the Chief Economist at Absa hailed Uganda’s improvment, saying the oil factor will soon play a big role in its rankings.

“Uganda’s score improved on the AFM Index 2021 while other markets saw their scores fall. Much of the activity is returning even as credit growth becomes modest. Uganda’s oil development is close to becoming a reality and investment is set to rise and be transformative for Uganda’s economy,” Gable said.

Absa Group Limited (‘Absa Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups.  Absa Group has a presence in 12 .

🔴 Pillar 1: Market depth

South Africa 97
Nigeria 62
Mauritius 57
Botswana 55
Morocco 53
Ghana 50
Kenya 46
Uganda 45 🇺🇬
Tanzania 45
Egypt 42
Angola 38
Mozambique 38
Zambia 37
Senegal 36
Ivory Coast 34
Malawi 33
Namibia 32
Rwanda 30
Seychelles 29
Cameroon 28
Eswatini 24
Lesotho 11
Ethiopia 11

🔴 Pillar 2: Access to foreign exchange

South Africa 80
Egypt 79
Rwanda 61
Uganda 61 🇺🇬
Tanzania 59
Eswatini 59
Ghana 59
Mauritius 55
Ivory Coast 55
Zambia 50
Lesotho 48
Senegal 46
Kenya 45
Mozambique 44
Malawi 44
Namibia 44
Morocco 40
Angola 40
Seychelles 38
Cameroon 31
Botswana 29
Ethiopia 28
Nigeria 20

🔴 Pillar 3: Market transparency, tax and regulatory environment

Nigeria 86
South Africa 84
Mauritius 83
Kenya 79
Ghana 75
Morocco 73
Zambia 69
Rwanda 67
Tanzania 66
Botswana 61
Uganda 60 🇺🇬
Egypt 60
Seychelles 57
Malawi 56
Ivory Coast 55
Angola 54
Lesotho 50
Senegal 43
Mozambique 42
Namibia 41
Eswatini 37
Cameroon 34
Ethiopia 28

🔴 Pillar 4: Capacity of local investors

Namibia 100
South Africa 77
Mauritius 68
Botswana 60
Nigeria 44
Eswatini 41
Morocco 39
Seychelles 31
Kenya 24
Tanzania 23
Ghana 21
Mozambique 18
Malawi 18
Zambia 18
Egypt 18
Uganda 16 🇺🇬
Cameroon 15
Rwanda 15
Lesotho 13
Angola 12
Ivory Coast 11
Senegal 11
Ethiopia 10

🔴 Pillar 5: Macroeconomic opportunity

Egypt 82
South Africa 77
Botswana 76
Uganda 70 🇺🇬
Nigeria 69
Mauritius 67
Tanzania 65
Ghana 65
Morocco 64
Rwanda 64
Namibia 64
Eswatini 64
Kenya 62
Ivory Coast 62
Seychelles 62
Ethiopia 62
Senegal 59
Cameroon 57
Malawi 55
Mozambique 52
Lesotho 52
Zambia 47
Angola 41

🔴 Pillar 6: Enforceability of standard master agreements

Ghana 100
Nigeria 100
South Africa 100
Uganda 90 🇺🇬
Mauritius 90
Zambia 85
Malawi 80
Kenya 28
Botswana 25
Rwanda 18
Mozambique 18
Egypt 10
Tanzania 10
Morocco 10
Namibia 10
Eswatini 10
Ivory Coast 10
Seychelles 10
Ethiopia 10
Senegal 10
Cameroon 10
Lesotho 10
Angola 10