Country continues top form in ABSA Africa Financial Markets Index
Botswana placed a respectable 6th out of 28 African nations that participated in the 2023 Absa Africa Financial Markets Index.
Now in its 7th year, the annual index evaluates countries’ financial development based on market accessibility, openness and transparency. The aim is to show how economies can reduce the barriers to investment which can, in turn, boost sustainable growth.
6th place, achieved with 59 points, marks an improvement from last year’s rating, when BW came in at 8th, but is still well short of the second-place the country managed in 2018.
Expressing delight at another top 10 finish, Director of Banking and Finance at the Ministry of Finance, Itumeleng Mareko, stressed it was not by luck that Botswana continues to do well in the index.
“This is largely due to deliberate efforts made to improve the state of our financial markets. Botswana’s Pillar 3 on market transparency, tax, and regulatory environment score improved by nine points this year as it implemented new measures on this front. For example, in July 2023, the Botswana Stock Exchange Limited approved a 25 percent discount on initial listing fees for sustainable bonds,” revealed Mareko, adding Bots continues to lead in macroeconomic environment and transparency.
Areas countries were judged on include: market depth, access to foreign exchange, market transparency, tax, and regulatory environment; capacity of local investors, macroeconomic environment and transparency and legal standards and enforceability.
“As a country we also have relatively low ratios for non-performing loans and external debt, particularly where external debt is just 10 percent of gross domestic product. This demonstrates the financial discipline and prudence that we all demonstrate as economic agents and regulators. Government is determined to put in place policy measures, frameworks and standards that can boost investor confidence,” explained Mareko.
The tough global economic environment has hit financial markets in Africa hard again this year, with various surveys identifying inflation, rising interest rates in advanced economies and geopolitical tensions as challenges to their domestic markets.
However, the inflation outlook improved in Botswana in 12 months to June.
While inflation hit double-digits in 2022, it has since fallen to below 5 percent, which is within the central bank’s 3-6 percent range.
For her part, Absa Bank Botswana Managing Director (MD), Keabetswe Pheko-Moshagane said it is pleasing to note the progress African markets were making.
“While the purse strings may remain tight on the global financial markets for some time, the African continent needs to position itself as a top destination for capital investment. Investors continue monitoring the attractiveness of African capital markets as we continue to see huge strides taken in easing the turbulent economic headwinds that have gripped AFMI nations in recent years,” she said.