Barclays Africa Group Limited Africa Financial Markets Index 2017 Sponsored by Barclays Africa Group Limited Barclays Africa Group Limited is not affiliated with Barclays PLC
Barclays Africa Group Limited
Africa Financial Markets Index 2017
Sponsored by Barclays Africa Group Limited
Barclays Africa Group Limited is not affiliated with Barclays PLC
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The Official Monetary and Financial Institutions Forum is an independent think tank for central banking, economic policy and public investment – a non-lobbying network for best practice in worldwide public-private sector exchanges. At its heart are Global Public Investors – central banks, sovereign funds and public pension funds – with investable assets of $33.8tn, equivalent to 45% of world GDP.
With offices in both London and Singapore, OMFIF focuses on global policy and investment themes – particularly in asset management, capital markets and financial supervision/regulation – relating to central banks, sovereign funds, pension funds, regulators and treasuries. OMFIF promotes higher standards, performance-enhancing exchanges between public and private sectors and a better understanding of the world economy, in an atmosphere of mutual trust.
Barclays Africa Group Limited
OMFIF Editorial and Marketing teamSimon Hadley, Production Manager, Kat Usita, Research Assistant Oliver Thew, Programmes Manager, Sarah Holmes, Head of Meetings, Sarah Butler, Assistant Head of Development, James Fitzgerald, Marketing Executive.
Barclays Africa Group Limited (‘Barclays Africa Group’ or ‘the Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups.
Barclays Africa Group offers an integrated set of products and services across personal and business banking, corporate and investment banking, wealth and investment management and insurance. We are strongly positioned as a fully local bank with regional and international expertise. We are committed to Shared Growth, which for us means having a positive impact on society and delivering shareholder value.
Barclays Africa Group operates in 12 countries, with approximately 40 000 employees, serving close to 12 million customers. As of June 2017, Barclays PLC is a minority shareholder in Barclays Africa Group.
The Group registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.
The Africa Financial Markets Index was produced by OMFIF in association with Barclays Africa Group Ltd. The scores on p.7 and elsewhere record the total result (max=100) of assessments accross Pillars 1-6. For methodology seee individual Pillar assessments and p.34-35.
OMFIF conducted extensive quantitative research and data analysis with additional data input from Barclays. Qualitative survey data were collected and analysed by OMFIF with significant in-country expertise provided by Barclays. The report was written by OMFIF, with Barclays acting in an advisory capacity.
© 2017 OMFIF Ltd. All Rights Reserved.
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Acknowledgements
The authors consulted policy-makers, regulators and market practitioners across African financial markets in writing this report, whom we thank for their views and opinions.
Keith Jefferis, Managing Director, Econsult, Botswana
Keneetswe Maemo Ntebang, Manager (capital markets), Non-Bank Financial Institutions Regulatory Authority, Botswana
Mia Thom, Technical Director, Centre for Financial Regulation and Inclusion
Moustapha Coulibaly, Managing Partner, Grant Thornton, Ivory Coast
Evans Osano, Director, Capital Markets Development, and Vimal Parmar, Capital Markets Development Specialist, Financial Sector Development Programme, Africa
Edward George, Head of Group Research, and colleagues, Ecobank
Miguel Azevedo, Managing Director, Citigroup and Head of Investment Banking, Africa
Sunil Benimadhu, CEO, Stock Exchange of Mauritius
Vipin Y. S. Mahabirsingh, Managing Director, Central Depository & Settlement Co Ltd, Mauritius
Ngoni Bopoto, Research Analyst, Namibia Equity Brokers, Namibia
Frank H. Moormann, CEO, Financial Consulting Services, Namibia
Michelle van Wyk, Co-Head, RMB Namibia at FNB Namibia, and Conrad Dempsey, CEO, RMB Namibia
Omotola Abimbola, Investment Research, Afrinvest Securities, Nigeria
Wole Layeni, ARM Securities, Nigeria
Michelle Akinrinade, Investment Banking, Chapel Hill Denham, Nigeria
Peter Moses, Research Analyst, Cordros Capital, Nigeria
Kaodi Ugoji, Vice President, FMDQ OTC Securities Exchange
Tayo Adewale, Vice President, Equity Capital Markets, at Stanbic IBTC Capital Limited, Nigeria
Elmarie Hamman, Specialist, Capital Markets Department, Financial Services Board, South Africa
Eva Murigu, Associate Principal, Africa Strategy, Global Research, Standard Chartered Bank
Ermes Caramaschi, Managing Director, EA Capital, Tanzania
Isaac Sekitoleko, Research and Market Development Officer, Capital Markets Authority, Uganda
Kammy Naidoo, Global Programme Advisor, United Nations Capital Development Fund
Ayodele Odusola, Chief Economist and Head of Strategy and Analysis, Asha Kannan, Economic Advisor on Africa, and colleagues at the United Nations Development Programme
Nonde Sichilima, Manager, Market Supervision, Securities and Exchange Commission, Zambia
And individuals from the following institutions: Diamond Bank, PwC, International Monetary Fund, The Johannesburg Stock Exchange, SBG Securities Ltd. and Deloitte
Barclays Africa GroupJeff Gable, Chief EconomistGeorge Asante, Managing Director and Head of Markets (Africa ex. SA)
OMFIFDanae Kyriakopoulou, Chief Economist and Head of ResearchBen Robinson, Senior EconomistBhavin Patel, Economist
AFRICA FINANCIAL MARKETS INDEX 2017AFRICA FINANCIAL MARKETS INDEX 2017
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Contents
6-7 Forewords
8-10 Executive summary Contains country comparisons and highlights opportunities and challenges for the region’s financial markets.
11-14 Pillar 1: Market depth Examines size, liquidity and depth of markets and diversity of products in each market.
15-18 Pillar 2: Access to foreign exchange Assesses the ease with which foreign investors can deploy and repatriate capital in the region.
19-22 Pillar 3: Market transparency, tax and regulatory environmentEvaluates the tax and regulatory frameworks in each jurisdiction, as well as the level of financial stability and of transparency of financial information.
23-26 Pillar 4: Capacity of local investors Examines the size of local investors, assessing the level of local demands against supply of assets available in each market.
27-30 Pillar 5: Macroeconomic opportunity Assesses countries’ economic prospects using metrics on growth, debt, export competitiveness, banking sector risk and availability of macro data.
31-33 Pillar 6: Legality and enforceability of standard financial markets master agreements Tracks the commitment to international financial market agreements, enforcement of netting and collateral positions and the strength of insolvency frameworks.
34-35 Indicators and Methodology
Africa Financial Markets Index 2017
AFRICA FINANCIAL MARKETS INDEX 2017AFRICA FINANCIAL MARKETS INDEX 2017
6 FOREWORDS
Partnership and collaboration
There is general agreement that growth momentum in Africa remains fragile, and that
the ‘Africa rising’ narrative is now far more nuanced than before, with different regions and indeed countries facing divergent economic prospects. Following from this, global financiers are de-risking and this puts the onus on stakeholders in Africa to take responsibility for addressing structural gaps in African financial markets in order to meet investment hurdles and continue to attract local and global capital.
Addressing these structural challenges will require partnership and collaboration from all partners. Importantly, a common fact-base is required to anchor conversations and facilitate discussions towards finding solutions. The African Financial Markets Index, which is a quantitative and qualitative assessment of the anatomy of Africa’s financial markets, is an important tool in this endeavour. The Index intends to drive conversations among policy-makers, market participants and other partners to address gaps and track progress on an ongoing basis.
While what will be successful or effective interventions will be heavily dependent on country-specific circumstances, I fundamentally believe that addressing legal, infrastructural, and consistent publication of market data gaps is critical to Africa’s ability to tap into local and global savings pools. Mobilising these resources will help accelerate productive investment that contributes to sustainable domestic employment creation and generates income to service the underlying debt.
The inaugural African Financial Markets Index is an important barometer measuring the progress and potential of Africa’s financial markets.
Africa has unmatched capacity in terms of talents, natural resources, a young, growing and increasingly
urban population, and a hugely entrepreneurial spirit. It has faced challenges from the post-2014 commodity cycle downturn, but the impact on countries across the continent has been varied. Some have increased their growth rates as a result of cheaper energy imports and falling borrowing costs. Others, hit by lower export prices, have sought to improve their economic governance, increase the sustainability of their fiscal positions and diversify their economics sectors in order to improve resilience to future shocks. This is creating a strong basis on which to achieve sustainable growth.
Developing financial markets infrastructure and attracting private capital from Africa and beyond are key elements in Africa’s development. This can offer additional growth and funding opportunities for local firms, providing access to long-term financing and helping them overcome some of the challenges of low lending rates and high costs across the continent. Financial market development also offers opportunities for international and domestic investors to access fast-growing African countries. In the context of low returns on assets in more traditional markets, this is an ever more important consideration.
This report by OMFIF and Barclays Africa Group comes at an important point in the transition of African economies and is a welcome contribution to understanding these opportunities and risks. It provides a useful tool for the asset management community as well as for African countries generally in order to gauge their performance against their peers. In exploring the nuances and regional or local differences that are often overlooked in analyses of the continent, it provides a balanced account of African financial market development.
At a time when the ability to attract foreign investment is becoming increasingly important to Africa’s growth prospects, I hope this report will heighten international understanding of and interest in our continent. This is a compelling account of the main issues affecting African financial market development, and I warmly commend it.
Africa’s financial market opportunities
Célestin MongaVice President and Chief Economist, African Development Bank
Peter MatlareExecutive director, Barclays Africa Group Ltd
AFRICA FINANCIAL MARKETS INDEX 2017
1 South Africa 92 Highly developed markets but challenging macroeconomic outlook
2 Mauritius 66 Strong regulatory and legal framework constrained by low market turnover
3 Botswana 65 High level of openness but lacking product diversity
4 Namibia 62 Restrictive regulations hamper strengths in size and openness
5 Kenya 59 Strong contract enforcement but over-cautious regulators
6 Nigeria 53 Large economy with good prospects but improvements in transparency needed
7 Ghana 49 Substantial growth from a low base provides financial market opportunities
8 Rwanda 48 High transparency and adherence to standard master agreements
9 Zambia 47 Relatively high level of product diversity but low liquidity
10 Uganda 47 Good foreign exchange access but low local investor capacity
11 Tanzania 44 Relatively high market transparency hindered by capital restrictions
12 Morocco 42 Capital restrictions and low transparency hamper prospects
13 Ivory Coast 41 Regional exchange creates growth opportunities from low base
14 Egypt 39 Problems from international reporting standards and contract enforcement
15 Mozambique 37 Low market depth and transparency holding back development
16 Seychelles 29 Good economic growth but lack of financial market breadth and depth
17 Ethiopia 22 Fast-growing economy but no financial market depth or local investor capacity
INTRODUCTION 7
South Africa ahead, others show strengths
Development of local investor capacity and ability to attract foreign capital are key points of focus for African economies. Countries across the continent are
implementing a growing number of national policy frameworks for market development. The Index intends to track progress annually, supplying a toolkit for countries wishing to build financial infrastructure. Given its size and historical position, South Africa tops the 2017 list. Others are closing the gap. Mauritius and Botswana have strengths in tax and regulation and access to foreign exchange. Kenya and Ghana provide signs of progress. Ivory Coast, with a low overall score, is home to a growing regional bourse, pointing to future improvement.
Score across all pillars, max = 100.
Africa Financial Markets Index 2017
8 EXECUTIVE SUMMARY
Building Africa’s financial markets
>p.10
The Africa Financial Markets Index evaluates financial market development in 17 countries, as well as highlighting economies with clearest growth prospects. The aim is to show not just present positions but also how economies can improve market frameworks
to meet yardsticks for investor access and sustainable growth. The Index assesses countries according to six pillars: market depth; access to foreign exchange; tax and regulatory environment and market transparency; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts, collateral positions and insolvency frameworks.
In addition to quantitative analysis, OMFIF gained additional insights by surveying 60 top executives from financial institutions operating across the 17 countries, including banks, investors, securities exchanges, regulators, audit and accounting firms and international financial and development institutions.
Morocco
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Pillar 2: Access toforeign exchange
Pillar 3: Market transparency, tax and regulatory environment
Pillar 4: Capacity of local investors
Pillar 5: Macroeconomic opportunity
South Africa 99Mauritius 60Egypt 54Kenya 49Morocco 48Nigeria 47Botswana 44Namibia 44Zambia 43Uganda 42Tanzania 41Ghana 41Mozambique 40Ivory Coast 33Rwanda 21Seychelles 16Ethiopia 10
South Africa 87Botswana 82Uganda 79Ivory Coast 74Namibia 70Kenya 64Mauritius 56Nigeria 56Ghana 53Zambia 53Rwanda 40Tanzania 40Egypt 39Mozambique 33Morocco 33Seychelles 29Ethiopia 24
South Africa 95Mauritius 95Nigeria 94Rwanda 82Botswana 79Tanzania 69Kenya 68Ghana 67Morocco 65Ivory Coast 59Uganda 57Zambia 57Namibia 54Mozambique 48Egypt 40Seychelles 28Ethiopia 20
South Africa 100Namibia 94Botswana 49Mauritius 38Kenya 31Tanzania 28Morocco 28Egypt 25Seychelles 18Mozambique 18Nigeria 16Rwanda 14Zambia 13Uganda 13Ghana 12Ivory Coast 12Ethiopia 10
South Africa 73Nigeria 67Namibia 67Uganda 66Morocco 65Kenya 65Botswana 63Mauritius 58Seychelles 56Rwanda 55Mozambique 55Egypt 54Ghana 54Tanzania 49Ethiopia 47Zambia 47Ivory Coast 42
OVERALL PILLAR SCORES max = 100
9
South Africa
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Ghana
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Pillar 6: Legality and enforceability of standard financial markets master agreements
South Africa 100Mauritius 93Kenya 81Rwanda 76Zambia 73Botswana 70Ghana 67Namibia 42Tanzania 37Nigeria 35Seychelles 30Mozambique 30Uganda 28Ivory Coast 23Egypt 21Ethiopia 18Morocco 15
OVERALL PILLAR SCORES max = 100
Pillar 1 Market Depth
Pillar 2 Access to foreign exchange
Pillar 3 Market transparency, tax and regulatory environment
Pillar 4 Capacity of local investors
Pillar 5 Macroeconomic opportunity
Pillar 6 Legality and enforceability of standard financial markets master agreements
KEY
AFRICA FINANCIAL MARKETS INDEX 2017
AFRICA FINANCIAL MARKETS INDEX 201710
The report finds that:
l While South Africa achieves the highest score for the
index as a whole (92 out of a possible 100), despite its
macro challenges. Many indicators, including GDP growth
and export competitiveness, have deteriorated recently.
l Mauritius, in second place in the Index with an overall
score of 66, is fast improving across a range of key areas.
It has one of the strongest financial legal frameworks
as well as a favourable tax environment and market
transparency, scoring above 90 in both pillars.
l Ethiopia achieves the lowest
score out of all countries in the
Index owing to the lack of a
securities exchange, minimal
local investor capacity and low
enforceability of contracts.
l The greatest area for
improvement for the Index as
a whole is the capacity of local
investors. Beyond the two top-
scoring countries of South Africa
and Namibia, which average 97,
the remaining countries average
just 22. According to respondents
to the OMFIF survey, increasing
the range of assets for local
investors, as well as boosting
education around financial markets, is key to developing
this sector.
l Transparency, tax and regulatory environment (Pillar
3) is the highest-scoring within the Index, with many
countries having improved their financial market rules
E
SE
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4447
4573
N
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S
SOUTHERN AFRICA SHOWSTHE WAYAverage results by region
in recent years. However, implementation of existing
regulations remains a key challenge for many countries.
l Challenges including low commodity prices, weak
external demand and reduced capital inflows facing the
continent mean that no country achieves top marks for
macroeconomic opportunity – the highest score, for
South Africa, is just 73. However many countries have
significant prospects for development, leading to an
overall average score of 58 for this pillar – the second
highest in the index after Pillar 3
(transparency, tax and regulatory
environment).
l South Africa, Egypt and Kenya
score relatively highly for liquidity.
However, liquidity remains a major
issue for most of the countries in the
Index. While market capitalisation
averages 61% of GDP across
all countries, turnover is low.
Excluding Egypt and South Africa
equity turnover is just 2.4%, while
excluding South Africa and Kenya
bond market turnover is just 4.2%.
High liquidity for Egypt and Kenya
exists despite the low availability of
international credit ratings for these
countries. Boosting the number of ratings could lead to a
rapid growth of these markets in coming years.
l Access to foreign exchange remains a substantial
challenge in most Index countries, despite its primary
importance to developing local financial markets. Capital
controls have increased over the last three years in
Rwanda, Tanzania and Zambia, and remain severe for
Egypt, Morocco and Mozambique, contributing to low
scores for these countries.
l Partly as a result of these restrictions, portfolio
investment flows remain low across the Index countries.
As a share of GDP, net portfolio flows averaged just 6%
in 2016, although Mauritius is a substantial outlier with
net portfolio flows equal to 60% of GDP. The relative
openness of South Africa, Mauritius and Kenya means
they have the highest net portfolio investment flows in
absolute terms, of $9bn on average, against $440m on
average for all other countries.
l Africa’s financial markets, while growing, remain
fragmented. Survey respondents emphasised the
importance of encouraging regional bourses, cross-border
listings and harmonised regulatory standards as key to
improving financial markets across the different regions.
However beyond the regional stock exchange in western
Africa, such coordination remains limited.
AIM OF INDEXAt this important point in the transition of African
economies, and with growing foreign investment
interest in the continent and its potential for
mobilising local resources, the Index provides a useful
tool for the investment community as well as for Africa generally to gauge countries’ performance.
Pillar 1:Market depth
PILLAR 1: MARKET DEPTH
African financial markets have traditionally suffered from a lack of
depth relative to other regions. This has been a key factor holding back the ability of firms and investors within and beyond the continent to exploit expansion opportunities. Investors need to access suitable assets in the required sizes and with the desired financial characteristics, while African firms require growth finance from abroad that is often not available from domestic or regional sources.
More than 20% of African businesses view access to finance as the biggest
obstacle to growth, according to the World Bank Enterprise Survey, against around 13% on average for the rest of the world (excluding Africa). This highlights the need to increase financing options via the development of financial markets.
The issue is particularly pronounced for small and medium-sized enterprises, which form the backbone of the economy as the largest job creators and as the largest combined share of output, and which experience severe challenges in accessing bank financing. This is partly the result of high concentration across the banking sector in Africa. The market
share of the three largest banks in Africa is, on average, over 70%, according to the World Bank, contributing to high interest rate spreads. The high cost of loans in turn challenges the private sector’s access to credit. Owing to information asymmetries, a high degree of informality and other factors, banks have focused their lending on large enterprises and government entities as a way to minimise their risk exposure.
These difficulties have been compounded by regulatory issues such as the type of assets that are acceptable as collateral for bank loans. The World Bank estimates that African businesses’ assets are composed, on average, of 75% ‘movable assets’ (including inventory, equipment, farm products, accounts receivable and intangibles) and just 25% real estate. Yet, collateral requirements are on average 80% real estate and 20% moveables. These factors mean many African companies are unable to secure bank financing, resulting in a significant gap in access to finance across the continent.
Analysis from the International Monetary Fund shows that relaxing these borrowing constraints could increase GDP levels by between 8% (in Nigeria) and 20% (in the West African Economic and Monetary Union) through a substantial improvement in total factor productivity over the long term.
Pillar 1 of the Africa Financial Markets Index measures market depth using five categories made up of 14 indicators (see Figure 1.1). These include the range of financial products, currencies and hedging options available across national exchanges, as well as the size of financial
12
South Africa scores highest for market depthDespite a general increase in active market participants and the size of financial assets relative to GDP across the continent, access to deep markets remains a challenge for investors and companies.
Figure 1.1: South Africa tops list for depth and liquidityPillar 1 breakdown: Ranking of individual categories, max = 500 (LHS) Harmonised score, max = 100 (RHS)
Source: National Stock Exchanges, African Securities Exchanges Association, Thomson Reuters, Barclays, National Central Banks, Barclays Africa Financial Markets Index and OMFIF Survey. Note: Individual category totals (LHS) provide rankings for product diversity, liquidity, size of markets, depth and primary dealer system. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
0102030405060708090100
050
100150200250300350400450500
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Product diversity Size of markets Liquidity
Depth Primary dealer system Harmonised score (RHS)
“Liquidity is negatively affected by the structure of investors - many of the assets are
held to maturity by pension funds.”
Senior manager, Big Four accounting firm, Zambia
assets relative to GDP. Turnover and liquidity across the different markets is a key element. Existence of effective primary dealer systems and secondary market makers is also measured.
South Africa is the highest scorer across all indicators, reflecting its highly developed market infrastructure and deep connections with other countries in the region, as well as its role as an intermediary for financial market participants from countries outside Africa to access the continent.
The market capitalisation of listed companies in South Africa stood at over 350% of GDP at end-2016, with turnover (the ratio of equities traded to total market capitalisation) at 41% (see Figure 1.2).
The next largest country by market cap is Botswana, with listed companies valued at almost 270% of GDP. However, with much lower trading volumes, turnover of equities to market cap was only 0.6% in 2016, giving it a significantly lower liquidity score. Egypt has the highest equity turnover ratio, at more than 54%, though its total market capitalisation is just under 11% of GDP. Across other countries tracked as part of the index, market capitalisation averages 27% of GDP, when excluding Botswana and South Africa.
Bond markets show a similar pattern. With the exception of South Africa, Tanzania and Kenya, low trade volumes are the norm, despite high nominal figures for bonds outstanding in many countries. This partly reflects the nature of domestic investors, which tend to be large buy-and-hold institutions.
While low market activity is reflected in the low score for liquidity indicators across the index countries, with the exception of South Africa and Egypt, the situation is gradually improving. According to respondents to the OMFIF-Barclays survey of African financial institutions, there have been increases in liquidity conditions over the past 12-24 months in Botswana, Ivory Coast, Mauritius and Nigeria, reflecting progress on the speed of transactions as well as the cost of listing or accessing assets (see Figure 1.3 on p.14).
However significant hurdles remain regarding product diversity. These include the low availability of hedging products and currencies offered on exchanges, as well as the overall size of markets and the ability to attract foreign investors.
13
secondary markets. However, activity and turnover on these markets remains relatively low. Excluding South Africa (with a turnover ratio of almost 1000%), the average ratio of traded bonds against total bonds outstanding is just 14%, as Figure 1.2 shows.
Boosting market depth
Institutions surveyed in this research emphasised the importance of increasing small and medium-sized enterprises’ access to financial markets, including through dedicated market segments, as a vital means of deepening markets. Improving the regulatory and policy environment is a prerequisite for attracting foreign capital (see Pillar 3 for more details). This is particularly important following the post-2014 collapse in energy and commodity prices, which has caused domestic capital to retrench and commodity-related foreign investment to decline (see Figure 1.4 on p.14).
Yet there are fears that attempts by securities exchanges to boost market
AFRICA FINANCIAL MARKETS INDEX 2017
COUNTRY SNAPSHOTS
BotswanaStrengths High market capitalisation, low capital controls, high regulatory bank capital ratios Areas for improvement Low interbank foreign exchange trading, very low bond market and equity turnover, limited product diversity
Ivory Coast
Strengths Development of regional bourse to boost liquidity and funding options, high central bank reserves to portfolio flow ratio Areas for improvement Compliance with reporting and accounting standards, official exchange rate reporting standards
Mar
ket c
apita
lisat
ion,
%
of G
DP
Tota
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quiti
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% o
f M
arke
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italis
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Tota
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bond
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ket,
%
bon
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utst
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orpo
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ds
outs
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liste
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exc
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bn
South Africa 358 41 970 195Egypt 11 54 23 39 Kenya 28 8 48 9Tanzania 18 2 4 2 Morocco 57 9 1 55Mozambique 9 0 4 0Nigeria 13 4 0 16 Ivory Coast 35 4 4 5 Mauritius 80 4 0 6 Seychelles 10 2 - 0Zambia 32 0 15 2 Botswana 269 1 5 1Uganda 25 1 - 2Ghana 32 1 7 12 Namibia 24 1 0 12 Rwanda 40 1 2 0Ethiopia - - - -
Figure 1.2: Market size and liquidity
Source: Thomson Reuters, National Stock Exchanges, African Securities Exchanges Association, OMFIF analysis
As Figure 1.5 shows currency availablity of products on the 17 stock exchanges is highly diverse. In addition, only South African rand-denominated local bonds can be cleared on international platforms such as Clearstream or Euroclear. This underlines the relative lack of depth of other markets and their shortcomings in accessing international capital. The quality and quantity of secondary market-makers have improved over recent years, with 11 out of the 17 countries having established
AFRICA FINANCIAL MARKETS INDEX 2017
0
5
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15
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25
30
35
40
Average2005-09
2010 2011 2012 2013 2014 2015 2016 2017
Inward portfolio investments Outward portfolio investmentsNet portfolio flows
Figure 1.4: Net portfolio flows have fallen rapidly since 2012Figures for Africa as a whole, $bn
Source: National Exchanges, OMFIF survey
Source: African Development Bank, OMFIF analysis
Figure 1.3: How African markets rank - a qualitative assessment Harmonised results based on seven survey indicators, max =700
14
depth are being hindered by some central banks out of ‘concerns about financial market-related volatility’, according to Kenya-based investors. In other countries, notably Egypt and Morocco, foreign exchange restrictions and limited currency convertibility have hampered financial market development (see Pillar 2 for more details).
Elsewhere, increased hesitancy among foreign investors has been set off by domestic policies, such as the New Equitable Economic Empowerment Bill in Namibia. There are additional concerns that large, state-owned enterprises dominate capital market transactions in some countries, while smaller companies face difficulties.
The issue of openness is an important focus for investors. As Pillar 2 explores, the level of control on access to foreign exchange is a key factor determining investment flows.
“There is a pressing need to reduce
the cost of market transactions, entry
and presence. We must create a compartment for SMEs to boost the overall market.”
Executive, Big Four accounting firm,
Ivory Coast
0
100
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300
400
500
600
700
Product diversity Cost Speed InformationAccess to int'l investors Regulatory environment Liquidity
Sout
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a
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Mor
occo
Source: Barclays survey. Note: Survey respondents were asked to rank seven measures of financial markets with scores of 1-5. A weighted average was applied to the results, harmonised on a 10-100 scale. Seychelles and Ethiopia excluded due to incomplete responses.
Figure 1.5: Currency availability of stock exchange products in 17 countries
OtherRenminbiSwiss FrancSterlingYenEuroDollarLocal Currency
Mauritius Ivory Coast
Unavailable currency
Available currency
KEY:
Pillar 2: Access to foreign exchange
16
Foreign investors’ ability to deploy capital relatively easily and repatriate
it when required, within acceptable time limits and in appropriate amounts, represent a key criterion for well-functioning financial markets. The presence (or absence) of capital controls, and the extent thereof, are therefore key considerations when assessing the state of financial markets. The level of foreign exchange liquidity and easily accessible, up-to-date foreign exchange data provide important measures of financial resilience. The ability of central banks to manage foreign investors’ demand for domestic currency is a vital additional indicator.
As in Pillar 1, South Africa ranks the highest in the index, reflecting its limited capital controls, high official exchange rate reporting standards, harmonised domestic exchange rate, and liquid interbank foreign exchange market (see Figure 2.1). The main challenge for South Africa’s financial markets is the relatively high ratio of portfolio investment flows to foreign exchange reserves. By contrast, Ethiopia, at the foot of this particular listing, ranks well below average in access to foreign exchange.
The South African Reserve Bank has the highest holdings of foreign currency across the 17 countries, standing at almost $40bn (excluding gold) at end-2016. However, this is less than 14% of GDP. Barclays and OMFIF have used as an indicator of foreign exchange resilience the ratio of currency reserves to portfolio stocks and flows. In South Africa, foreign reserves are less than 20% of the net stock of foreign portfolio investments. Net portfolio flows to South Africa in
2016, at minus $16.4bn, were equivalent to 40% of foreign exchange reserves. This indicates a certain vulnerability, as the ratio is the fourth highest across the 17 countries after Mauritius (where portfolio inflows of $7.2bn in 2016 were 166% of reserves), Namibia (with a ratio of 67%) and Kenya (with 46%).
A high ratio of portfolio investment flows compared with foreign reserves could be a source of financial instability in the event of large and sustained
outflows which cause the exchange rate to depreciate and general financial conditions to tighten. However, they also indicate a high degree of openness which is crucial to the development and smooth functioning of financial markets. Illustrating the dual nature of this indicator, the two countries with the highest level of net portfolio flows in 2016, South Africa and Mauritius, are also the two top-scoring countries for the overall Africa Financial Markets Index.
Capital controls: stability combined with vulnerabilityLower commodity prices confront governments with difficult choices. Capital controls can help stabilisation, but impede foreign investment. South Africa and Botswana show a mixed approach.
Figure 2.1: Ethiopia trails in access to foreign exchangePillar 2 breakdown: Ranking of individual categories, max = 400 (LHS) Harmonised score, max = 100 (RHS)
0102030405060708090100
050
100150200250300350400
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Official exchange rate reporting standard Capital controls
Interbank forex turnover Total net portfolio flow ratio to reservesPillar 2 Overall score (RHS)
Source: International Monetary Fund BOPS and Article IV, National Central Banks, OMFIF analysis. Note: Individual category totals (LHS) provide rankings for the exchange rate reporting standard, capital controls, interbank forex turnover and the net portfolio flow ratio to reserves. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
PILLAR 2: ACCESS TO FOREIGN EXCHANGE
17
Part of the reason for large investment flows in these countries is the low level of capital controls. South Africa, Mauritius, Botswana and Namibia have the lowest severity of foreign exchange restrictions (see Figure 2.2), and are again the four highest-scoring countries for the index as a whole. Tanzania and Rwanda have the lowest portfolio flow to reserves ratios, at 0.1% and 0.3%, respectively. Rather than signalling strength, however, this reflects in part the severity of their capital controls. This is one of the reasons why portfolio investment flows were just $5m and minus $3.2m, respectively, in 2016.
Currency volatility a challenge for open economies
Openness to foreign financial flows coincides with risks. The South African rand (and by extension the Namibian dollar which is pegged to the rand) were the most volatile currencies during 2016, with an average monthly standard deviation of almost 2.1%. Tanzania experienced the lowest volatility, with
Figure 2.2: Limited capital controls buoy southern African financial markets
Morocco
GhanaIvory Coast
Nigeria
Egypt
Ethiopia
KenyaUganda
Rwanda
Tanzania
Zambia
Namibia
Botswana
South Africa
Mozambique
Seychelles
Low-severity capital contolsModerate-severity capital contolsHigh-severity capital contols
a standard deviation of just 0.1%. However, as investors indicate in their responses to the survey, lack of currency movement, when resulting from currency controls and other restrictive measures, can present sources of instability in the longer run as asset fundamentals and the relative strengths and weaknesses of the economy are obscured. Part of Tanzania’s low volatility results from its currency restrictions. As Figure 2.3 on p.18 indicates, southern and eastern African countries have the most flexible exchange rate regimes, boosting their relative scores within the index.
Availability of high quality and frequently reported exchange rate data, as well as the existence (or absence) of a unified exchange rate, further influence countries’ scores in Pillar 2. Some countries have multiple rates, published by the central bank, securities exchange, and other official sources, in addition to unofficial rates. This can impede asset valuations and increase exchange rate
risks. South Africa, Botswana, Egypt and Mauritius are among those with a unified exchange rate, together with clear and frequent publication of official data, therefore achieving high scores. Ivory Coast has the lowest score for this indicator.
An important gauge of foreign exchange liquidity is the amount of foreign exchange traded in the interbank market. South Africa has by far the most active market, with almost $1.2tn turnover in 2016, according to central bank data. Kenya is in second place with almost $34bn and Ghana follows with $18bn. Beyond these countries, foreign exchange turnover is relatively low. This can reduce transaction speed and lower liquidity. These circumstances reflect market structures across Africa. As one Namibian financial firm indicates, among the components of the index, ‘Most capital providers sit in South Africa’ rather than domestically.
The importance of low capital controls and accurate foreign exchange data for attracting foreign capital and developing local markets is a recurring theme in
Mauritius
AFRICA FINANCIAL MARKETS INDEX 2017
AFRICA FINANCIAL MARKETS INDEX 2017
the OMFIF-Barclays research. As the managing director of a large international banking group with operations across Africa says, ‘Many investors believe the economics and business environment are rather exotic in Africa. So you need governance requirements, reporting standards and trading rules in line with international norms. There is no room for African exceptions – investors do not accept that.’
Market participants highlight importance of attracting foreign capital
Concerns over capital openness, official foreign exchange data reporting and foreign exchange liquidity are highly relevant in the competition to attract foreign investors. Senior members of a ‘Big Four’ accounting firm with offices throughout Africa highlight that ‘The main challenge is low volume of trade
affecting liquidity. As many African economies are relatively small, capital markets must be developed by attracting international investors to Africa’. This is supported by the chief executive of a Namibian financial services consulting firm, who emphasises that many African countries have ‘very limited sources of domestic capital’, and ‘must look outward for investors’.
Yet in some countries, market participants feel that government policy is having a ‘very negative effect’ on attracting such capital. Capital controls have increased over the last three years in Rwanda, Tanzania and Zambia, and remain severe for Egypt, Morocco and Mozambique. Investors can view negatively laws such as the New Equitable Economic Empowerment Bill in Namibia, which requires all businesses to have 25% ownership by black Namibians and 50% of top management to be from previously disadvantaged groups. As
one respondent from Namibia explains, ‘We do not have enough sufficiently qualified people in the country to fill all these positions.’ Company performance may suffer. ‘Local businesses can stop investing locally and export capital. This can motivate foreign investors to look for greener pastures elsewhere.’
Some countries are boosting their domestic investor base. Mauritius is implementing incentives to ‘raise the ratio of local investors to total population from the current of 10% to a minimum of 20% in the next five years’, according to the chief executive of the Mauritius stock exchange. This partly requires increasing the range of products local investors want to hold. As analysis in Pillar 3 makes clear, the commodity price downturn, and the need to create extra generators of growth, has intensified the requirement to attract foreign capital. Tax, regulatory and transparency issues are fundamental to this.
“Many financial market initiatives have
been stopped by the Kenyan central bank, out of concerns about potential impact on volatility. It would be ideal if they are
implemented.” Country expert, international financial institution, Kenya
Figure 2.3: Countries’ exchange rate regime and average monthly standard deviation of currency value, 2016, %
Morocco0.6
Ghana1.1
Ivory Coast0.9
Nigeria1.7
Egypt1.7
Ethiopia0.2
Kenya 0.1
Uganda0.4
Rwanda0.4 Tanzania
0.1
Zambia0.4
Namibia2.1
Botswana1.1
South Africa2.1
Mozambique1.3
0.5
0.3
Intermediate regimeFixed regime
Flexible regime
18
Pegged
Mauritius
Seychelles
Pillar 3: Market transparency, tax and regulatory environment
0.5
Intermediate regimeFixed regime
Flexible regime
Pegged
20
PILLAR 3: MARKET TRANSPARENCY, TAX AND REGULATORY ENVIRONHMENT
Robust financial market infrastructure is of vital importance for attracting
foreign investors and incentivising greater domestic investor participation. This requires a strong regulatory and operational environment, high quality reporting and accounting standards, and the availability of relevant financial information published regularly.
What is needed is a tax environment which, at the minimum, does not penalise financial market transactions and which, at best, aims to encourage them via incentives and other fiscal measures. Such a framework is especially
important in the early stages of market development. South Africa scores highly given its relatively high number of tax treaties with other countries (80 against an average of 22 for the 17 countries) and the existence of various tax incentives. These include the absence of capital gains taxes on financial transactions, securities transfers and dividends. South Africa has a relatively low average rebate time for withholding taxes, less than six months.
Rwanda has the lowest number of tax treaties, at just four, and has a 15% withholding tax on foreigners, among the highest in the 17 countries. Mozambique,
the Seychelles and Egypt score low for financial market transaction-related taxes, owing to a mixture of low tax treaties and financial market incentives, high withholding, capital gains and other taxes, and often long rebate periods.
Protection of minority shareholders and solid rules governing corporate actions such as share buybacks and rights issuance are necessary. Moreover, they are useful indicators of market development. Morocco, Uganda, Namibia Mozambique, Egypt and the Seychelles achieve low scores, while South Africa, Mauritius and Nigeria score highly.
Regulatory framework improving but uneven
Figure 3.1: Need for quality financial reporting Pillar 3 breakdown: Ranking of individual categories, max = 800 (LHS) Harmonised score, max = 100 (RHS)
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Financial stability regulationTax environmentMarket developmentProtection of minority shareholdersPillar 3 Harmonised score (RHS)
Reporting and accounting standardsFinancial information availabilityCorporate action governance structureExistence of credit rating
Strong regulations can enhance financial stability, particularly in underdeveloped markets, but the costs of implementation can be high. African countries must address overlapping regulations and a lack of coordination.
“The Nigerian stock exchange
is a good example for
others in terms of the quality of reporting
and regulatory frameworks. If
others adopt this approach, that
would make a big difference.”
Managing director, multinational bank
Source: Bank of International Settlements, IFRS, Deloitte IAS plus, World Bank Ease of Doing Business, S&P, Moody’s, Fitch, Barclays Africa Financial Markets Index and OMFIF Survey. Note: Individual category totals (LHS) provide rankings for financial stability regulation, tax environment, market development, minority shareholder protection, reporting/accounting standards, financial information availability, corporate action governance structure, existence of credit rating. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
21
of holding riskier assets and incentivising large institutions to hold on to their high quality assets.
Most countries of the 17, with the exception of Ivory Coast, Egypt, Ethiopia, Mozambique and the Seychelles, follow International Financial Reporting Standards (see Figure 3.2).
However, market participants responding to the survey highlight that, despite the existence of these rules in theory, many countries ‘may not in practice possess the requisite personnel for adequate financial reporting and internal audit’.
Some of the reported ‘low competence levels in IFRS’ are the result of ‘rapid changes to regulations, such as IFRS 9, IFRS 15, IFRS 16 and IFRS 17’, which makes compliance more difficult for firms in developing countries, according to a multinational development agency operating in Kenya.
Often there is a ‘divergence between large companies that are heavily regulated, such as banks and insurance companies, and the many smaller companies seeking external financing’, according to representatives of a Nigerian securities firm. ‘Active regulation and enforcement of existing rules are needed.’
As shown in the ‘reporting and
The managing director of a large multinational bank with operations across Africa notes, ‘The Nigerian Stock Exchange is a good example for others in terms of the quality of reporting and regulatory frameworks.’ The NSE publishes weekly data on volume, value and turnover for listed assets, monthly reports on transaction speeds, spreads and price movements, and on domestic versus foreign ownership of assets, among other data points. The exchange has been active in strengthening regulatory capacity. In 2016 it implemented a broker oversight and supervision system to improve the efficiency and security of regulatory communication between the exchange and its members, as well as a tool for reporting market violations and a trade surveillance system. As survey respondents argued, ‘If others adopt a similar approach this will make a big difference to developing national financial markets.’
On regulatory and reporting issues, most African markets remain far less developed than the main financial centres of Europe, Asia and North America. This is partly reflects the fast-changing nature of global financial regulations and reporting standards following the global financial crisis. Of the 17 countries in the index, as Figure 3.3 shows, just seven are implementing the Basel III international regulatory framework for banks. Nine are implementing Basel II rules, and one – Ethiopia – has implemented Basel I only. The high costs of regulatory capital required by Basel III can limit financial market activities by increasing the costs
Figure 3.2: Implementation of international financial reporting standards by jurisdiction
IFRS requiredIFRS permitted but not requiredGAAP only
Morocco
GhanaIvory Coast
Nigeria
Egypt
Ethiopia
KenyaUganda
Rwanda
Tanzania
Zambia
Namibia
Botswana
South Africa
Mozambique
Seychelles
Mauritius
Botswana III
Ivory Coast II
Egypt II
Ethiopia I
Ghana II
Kenya III
Mauritius III
Morocco III
Mozambique II
Namibia II
Nigeria III
Rwanda II
Seychelles III
South Africa III
Tanzania II
Uganda II
Zambia II
Figure 3.3: Implementation of Basel rules (I, II or III)
Source: Bank for International Settlements, national central banks, OMFIF. Note: Judgement based on a stated plan of implementation. Mauritius, Kenya, and Seychelles implementing both Basel II and III aspects. Ghana is finalising Basel II this year. Morocco implemented Basel III capital adequacy in July 2015, but continues to adopt other aspects. Uganda still uses the Basel I capital adequacy ratio.
AFRICA FINANCIAL MARKETS INDEX 2017
AFRICA FINANCIAL MARKETS INDEX 2017
accounting standards’ component of Pillar 3, Ethiopia, Egypt, Ivory Coast, the Seychelles and Mozambique have the lowest scores, while South Africa, Mauritius and Nigeria are among the highest.
Boosting regulatory coordination
In some cases, the need to regulate financial markets has led to overlapping rules which hinder market development. The chief executive of a pan-African bank based in Namibia stresses, ‘Coherence between the various financial industry regulators, and the speedy resolution of conflicts when they arise, are important areas to address.’
In many countries these problems are being tackled by the creation of capital markets authorities and national policy frameworks for developing financial markets. The OMFIF-Barclays ‘market development’ category indicator shows an active approach to financial market development in Egypt, Ivory Coast, Rwanda, Ghana and Nigeria.
Independent assessment of a company’s financial prospects, through external credit ratings, and the establishment of benchmarks for pricing financial assets, are necessary for creating investable assets. As an
international financial development agency, participating in the survey, said, ‘the primary and benchmark securities market must be developed’ as this is ‘the basis on which instruments in the capital markets can be priced’. This is important for attracting institutional investors. Many are required to invest exclusively in benchmark-eligible securities.
South Africa ranks highest in terms of availability of external credit rating. Its sovereign debt is rated by all three main international agencies and it has the highest number of corporate ratings of any of the index countries (see Figure 3.4). South African corporates combine a total 85 ratings by S&P, Moody’s and Fitch, against 28 in Mauritius, the next highest-scoring country. Nine countries in the index have no corporate credit ratings at all.
Although Egypt and Kenya have a low number of corporate ratings, they have relatively high liquidity scores for equity and bond turnover. This suggests that an increase in the number of ratings by international agencies and the development of domestic ratings agencies could lead to a significant catch up with South Africa’s dominant liquidity position,
Survey respondents highlight the importance of a stable regulatory environment. ‘The development
of capital markets is a function of underlying investment and capital deployment activity, which in turn looks towards regulatory certainty.’ The absence of regulatory certainty can be highly damaging. A large Namibian bank emphasises that the current regulatory environment ‘is seriously hampering Namibia’s image as an attractive investment destination’.
Market participants are clear that ‘regulators must be flexible in dealing with the ever-changing financial landscape. Incentives should be available for the creation of new financial products as well as the development of existing instruments’. Indeed, one representative of a large and highly active securities exchange in southern Africa comments that ‘while there is a move to tighten regulation, which is good when there is low audit quality, it could come at a cost to deepening the market.’ Regulatory coordination and harmonisation are important for reducing the costs of compliance and accelerating market development.
This is an important consideration not just for attracting foreign investors but also for boosting the participation of local investors, including pension funds and insurance companies. This is a primary concern for many securities exchanges seeking to increase market activity and raise liquidity. As Pillar 4 explores, the development of domestic assets that are attractive to local investors, and the creation of a regulatory environment that helps increase local investor capacity, are fundamental to boosting local financial markets.
Morocco
17 0
South Africa 14
38 33Namibia
500
Ghana1
00
Kenya 100
Nigeria
1 160
Egypt
12
0
Mauritius 618 4
Figure 3.4: Top scorers in pan-African corporate credit ratings
Note: The number of corporates rated by S&P, Moody’s and Fitch.
S&P Moody’s Fitch
22
COUNTRY SNAPSHOTSEgypt
Strengths High market liquidity, high equity turnover, effective primary dealer system in place Areas for Improvement Regulatory environment, FX restrictions limiting market growth, Prohibitive capital controls
Ethiopia Strengths High GDP growth from a low base, low bank NPL ratio Areas for Improvement Lack of securities exchange, limited access to foreign exchange, weak financial infrastructure
Pillar 4: Capacity of local investors
Domestic institutional investors across African markets, particularly pension
funds, have become an important force in local economies. Their assets have been boosted by improving pension and investment regulations and GDP expansion over the last decade. The value of pension assets across Africa increased by over $81bn from 2008 to 2015, while insurance assets grew by $65bn over the same period. In some countries hit by low commodity prices and currency
depreciation, however, this trend has begun to reverse.
The relatively small size of local financial markets and the relative illiquidity of their assets have created difficulties for the growth and development of local investors. Even though local investor assets have increased over the past decade, local financial markets have often not kept pace. The scores in Pillar 4 track the capacity of local institutional investors
(pension funds and insurance companies) according to their per capita assets under management and the size of their AUM against the total value of domestic financial market assets, weighted by liquidity.
Too big for the market
The size of South African pension fund assets per capita, at $7,800, makes the country an outlier in the sample.
Lack of liquid assets holds back domestic investorsLocal investors’ capacity has a crucial bearing on financial markets. Across Africa, local investors require a more complete asset market to meet their objectives. Asset shortages restrict African investors’ choice and push them towards international markets.
Figure 4.1: Dominant Namibian pension/insurance fundsPillar 4 breakdown: Ranking of individual categories, max = 200 (LHS) Harmonised score, max = 100 (RHS)
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100120140160180200
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Nam
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Gha
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Ivor
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Ethi
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Pension and insurance assets to domestically listed assetsPension fund assets under management per capitaPillar 4 Harmonised score (RHS)
Source: African Development Bank Group, OECD, National Stock Exchanges, African Securities Exchange, Thomson Reuters, Barclays Africa Financial Markets Index. Note: Individual category totals (LHS) provide rankings for pension and insurance assets as a ratio of domestically listed assets, and pension fund AUM per capita. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
COUNTRY SNAPSHOTSGhana Strengths Steadily growing pension assets, strong export market share, enforceable collateral positions and netting and set-off privisions Areas for improvement High NPL ratio, weak insolvency framework, low domestic investor capacity
Kenya Strengths High regulatory bank capital ratios, high reporting and accounting standards, active bond market and foreign exchange liquidity Areas for improvement Low historical growth in export market share, low GDP per capita, relatively small market capitalisation
Mauritius Strengths High net portfolio flows, strong regulatory environment, committed to international standard agreements Areas for improvement Low trading of corporate and sovereign bonds, despite large market size, low domestic investor capacity
24
PILLAR 4: CAPACITY OF LOCAL INVESTORS
25
Source: African Development Bank, OMFIF analysis.
Figure 4.2: Ghana’s pension fund assets grew by 50% in 2015Assets under management of private and public pension funds, annual change in 2015, %
-40
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Its total pension and insurance assets to domestically listed assets is 50%, against an average of 30% for the index countries. As South Africa’s market is highly liquid, it achieves the maximum score of 100 in the index (see Figure 4.1).
Namibia ranks second in Pillar 4, with a score of 94. The value of pension assets in Namibia totalled $14.4bn in 2015 (latest available data). This is much lower than the index average of $46bn, yet in per capita terms it is relatively high, at $4,175 against an average of $1,087 across the countries tracked in the index.
Namibia’s total ratio of local investment assets to listed assets is very high, at 99%, but this high score is partly the result of a low domestically listed asset to GDP ratio of 24%. The lack of asset availability and the concentration of assets held by long-term buy-and-hold investors means that turnover is very low. Listed bonds and equities on the Namibian Stock Exchange recorded a market turnover of $1bn in 2016 against $2.9tn for South Africa. As a result, investors are pushed towards accessing international markets to find deeper and more liquid assets to meet their investment objectives. The subsequent illiquidity of the domestic market reduces Namibia’s total score in the index.
Namibia’s low capital control restrictions mean investors are able
Tota
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sion
and
insu
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ts, $
bn
Tota
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$bn
Figure 4.3: On average countries’ local funds are 35% the size of their locally listed assetsLocal pension and insurance fund assets, and total value of bonds and equities listed
South Africa 627 1,247Morocco 44 114Nigeria 32 69Seychelles 17 0Namibia 14 15Egypt 13 75Kenya 13 28Botswana 9 41Mauritius 6 16Tanzania 5 11Uganda 2 8Ghana 2 26Ivory Coast 2 17Rwanda 1 3Zambia 1 9Mozambique 1 2
Ethiopia 1 -Source: African Development Bank, national securities exchanges, Thomson Reuters, OMFIF analysis
COUNTRY SNAPSHOTS
Morocco Strengths Strong underlying macro opportunity, low external debt and highly competitive consumer market Areas for Improvement Weak legal and regulatory framework, low foreign exchange turnover, low bond and equity turnover, erratic growth in recent years
Mozambique
Strengths Strong economic performance forecasted in next five years, strong official exchange rate reporting standards Areas for Improvement High debt-to-GDP ratio, severe capital controls, small market size, low liquidity
to go abroad relatively easily. This has allowed institutional investors to achieve relatively good earnings in the past. Regulations require pension funds and insurers to invest 35% of their assets domestically. By October 2018 this requirement will rise to 45%, increasing the restrictions on the investment opportunities of local investors to the local market, which is likely to ‘mean a change in earnings and performance’, according to a large Namibian bank.
Zambia has a low score in the index as a result of a relatively small domestic market and low domestic investor AUM. However the National Pension Scheme Authority plans to increase local investor capacity. There are plans to list at least three companies a year to meet a growing domestic demand.
Seychelles is an extreme case, where the size of local investors dwarfs the value of domestic assets. But the $17bn total local fund value listed in the table does not distinguish between the pension fund (around $90m) and insurance fund assets, which make up the remaining value. Many funds benefit from the islands’ advantageous offshore business laws and tax environment by domiciling their funds there. This contributes to the marked disparity between the value of insurance funds and the Seychelles pension funds.
AFRICA FINANCIAL MARKETS INDEX 2017
AFRICA FINANCIAL MARKETS INDEX 2017
On average, 50% of institutional investors in Africa allocate a portion of their portfolios to assets outside their own market, although their investments remain largely within their own regional bloc. As highlighted in the analysis in Pillar 1, diverse, liquid and deep markets attract investors from outside the home market. As examples, Namibian investors are active in South African markets and Kenya is active in the Mauritian market, reflecting the high liquidity of these locations.
A key consideration for developing local markets is to increase the range of product offerings attractive to domestic investors. According to the cheif executive of a large east African securities exchange, this should include developing exchange traded funds and improving brokers’ marketing of these products. Additional ways of increasing attractiveness include ‘enticing listed companies to increase free float’, and also persuading non-listed companies to seek a stock market listing.
Growth of local investors
Currency depreciation as a result of worsening current account deficits during the downturn in commodity prices have led to negative valuation effects. The value of pension fund assets in the index countries fell by over $113bn, while the value of insurance assets fell by $25bn, between 2014-15.
The majority of pension fund losses between 2014 and 2015 were in net commodity exporting countries, including South Africa and Nigeria. Ghana was an exception, as pension assets grew by over 50% in 2015, the largest increase across the 17 countries. This was largely the result of a higher asset base, stemming from an increase in the participation of informal-sector firms, which employ up to an estimated 85% of the working age population, which has boosted Ghana’s pension assets. Regulations including the National Pensions Act 2008, which requires an additional 1% pension contribution to be shared between employee and employers in the private sector, have contributed to the growth.
Growth in the capacity of local investors, as well as the size of listed assets, depend, in part, on the prospects for economic growth and stability in the coming years. While the commodity cycle downturn has created challenges, it has also forced countries to improve their domestic environment in order to increase their international attractiveness.
26
COUNTRY SNAPSHOTSNamibia Strengths Low FX restrictions, high market transparency, high domestic investor assets Areas for Improvement Challenging policy environment, low liquidity in domestic bond market
Nigeria
Strengths Low FX restrictions, high market transparency, high domestic investor assets, low debt-to-GDP ratio Areas for Improvement Economy highly exposed to commodity prices, weak insolvency framework
RwandaStrengths Strong insolvency framework, low debt-to-GDP ratio, high export market growth Areas for Improvement: Lack of product diversity, low financial market liquidity, relatively high tax on financial market transactions, low regulatory bank capital ratios
Seychelles
Strengths High regulatory bank capital ratios, high GDP per capita Areas for Improvement Low market liquidity, limited availability of financial information, low financial product diversity
South Africa
Strengths: High market capitalisation, liquidity and product diversity, favourable tax policies, strong regulatory environment and transparency Areas for Improvement Low GDP growth, low competitiveness and falling export market share
Tanzania Strengths High bond market liquidity, relatively high financial market transparency, below average debt-to-GDP ratio
Areas for Improvement: Severe capital restrictions, underdeveloped derivatives market
“The requirement for local asset investment for pension
funds and long-term insurers is increasing from 35% to 45% by October 2018. This will increase the flow of investments within
the country, even though investment opportunities are limited. The number of local
and dual-listed stocks on the Namibian exchange is a restrictive factor, reflecting
an overall lack of local assets. Secondary market trading is
very limited, with mainly buy/hold strategies.”
Executive, large Namibian Bank
Pillar 5: Macroeconomic opportunity
28
GDP growth across Africa as a whole was 2.4% in 2016, down from 4.2%
in 2013 – the last year before the rapid decline in oil and commodity prices – according to IMF data. The subsequent collapse in commodity prices had a significant impact on export revenues, fiscal balances, currency values and capital inflows across the continent. The countries tracked by the Africa Financial Markets Index have performed better than the African average, with growth of 3.8% in 2016, although they have experienced a larger absolute fall since 2013, when growth was 6%.
Nigeria and Botswana are the only countries to have experienced negative annual GDP growth since 2013, with minus 1.5% in 2016 for Nigeria (down
from around 6% in 2013) and minus 1.7% in 2015 for Botswana (down from 11.3% in 2013). However, the economies of Morocco, Mozambique, Namibia, South Africa and Zambia have also faced difficulties. In 2016 Namibia experienced just 0.1% GDP growth (against 6.5% in 2014) and South Africa less than 0.3% (down from 2.5% in 2014). While Morocco grew by nearly 1.5% in 2016, this is down from almost 5% in 2013. Rwanda, Egypt, Uganda, Mauritius and Kenya are the only countries where growth has accelerated over this period, with their growth rates increasing by 1.3, 1, 0.7, 0.4 and 0.3 percentage points, respectively.
The pace of economic expansion across the 17 countries is expected to
pick up in 2017 and 2018, to 4.5% and 5.1% respectively, driven by recovering commodity prices, improvements in macroeconomic management and a rise in domestic demand.
Macroeconomic framework
However, growth prospects are not even. Past experience highlights that a supportive macroeconomic framework, with sustainable monetary and fiscal policies, is highly conducive to encouraging investment and providing resilience in the face of uncertain external conditions.
Pillar 5 assesses the underlying macroeconomic opportunity through three key areas: economic performance (GDP growth, export competitiveness and living standards), financial risks (overall debt levels and strength of bank balance sheets), and macro transparency (monetary policy committee communication, budget communication and data standards).
Sound policies
The indicator for GDP growth used in the Index is a composite of the five-year historical average for each country (2011-16) and a five-year forecast (2017-22), weighted equally (see Figure 5.1). Some countries given relatively high growth projections by institutions such as the IMF, including Namibia and Morocco, achieve a lower score in the index because of periods of low or erratic growth over the past five years. This instability has often been the result of problematic debt dynamics, low levels of
Growth prospects and government policiesCountries with diversified economic structures and strong domestic demand have coped better with commodity price fluctuations. There is a high premium on sound macroeconomic management propelling sustainable growth.
Source: International Monetary Fund WEO, Barclays Africa Financial Markets Index
Figure 5.1: Growth has weakened but is more stable Compound annual growth rate, five-year average and forecast, %
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PILLAR 5: MACROECONOMIC OPPORTUNITY
29
export competitiveness or dependence on single sources of growth, mainly commodities, which can harm long term growth prospects.
When including these factors, Ethiopia, Ivory Coast, Rwanda and Tanzania score highly for GDP growth. They are relatively unexposed to commodity price shocks owing to the low share of commodities in their economies, and have relatively diversified sources of growth. They are however developing their economies from a relatively low base. On a per capita basis GDP ranges from $1,500 for Ivory Coast to just $730 for Rwanda, against an average of $3,500 for the 17 countries as a whole.
Export competitiveness
The export competitiveness of countries in the index provides an important indicator of future growth prospects. Strong export figures can reflect both sound domestic economic policies and diverse export partners, which can be useful to minimise negative demand shocks.
Ghana has increased its export market share by over 166% in the past five years, indicating significant improvements in competitiveness, although its overall market share remains small, at 0.02%
globally. The average for countries in the Index is 0.11%. Nigeria’s market share has fallen by 40%, but remains large in absolute terms (see Figure 5.4). South Africa has both the largest export market share as well as the largest decline in export share growth over the past five years, indicating falling competitiveness and lower demand for its exports in an arduous external environment.
Banking sector risk
The macro opportunity score on the Index is influenced by each country’s exposure to specific financial risk. This is determined by external debt to GDP levels as well as by the quality of assets in the banking sector. This latter factor is an important consideration as countries with high non-performing loan ratios may face elevated financial risks and vulnerability to external shocks. This has repercussions for the wider domestic economy. Economic or political shocks can further reduce the value of assets used as collateral and affect overall bank profitability and lending levels. Ghana’s NPL ratio of almost 15% is more than double the Index average of 6.2%, while at the other end of the scale Ethiopia’s NPL ratio is only 2.1%.
These data must be viewed in context,
however. Across Africa banks are often reluctant to lend to smaller borrowers owing to risk aversion, information asymmetry and lack of collateral assets. By focusing lending on larger companies banks may reduce their vulnerability to rising NPL ratios, but at the expense of lowering credit to smaller and medium sized businesses that need it. Ethiopia’s low NPL ratio reflects, in part, the difficulty of smaller borrowers in accessing bank financing. Ghana, by contrast, has a more accessible banking sector.
Meanwhile, risks associated with tightening monetary conditions in the US, or a period of heightened investor risk aversion or a financial shock to emerging markets generally, could cause yields to rise, creating problems for countries with high external debt. Countries covered by the Index have an average debt to GDP ratio of 50%, led by high debt levels in the Seychelles and Mauritius, at 203% and 127% of GDP, respectively. Nigeria, Egypt and Botswana all have ratios below 20%.
Financial transparency
The transparency of monetary policy decisions and of fiscal and budgetary data is important for avoiding policy
Figure 5.2: Benefits of low banking risk and financial transparency Pillar 5 breakdown: Ranking of individual categories, max = 700 (LHS) Harmonised score, max = 100 (RHS)
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GDP growth Living standardsGrowth and absolute export market share Quality of bank assetsDebt profile Macro data standardsMPC outcomes transparency Budget releasePillar 5 Harmonised score (RHS)
COUNTRY SNAPSHOTS
Uganda
Strengths Low foreign exchange restrictions, capital market development agenda Areas for Improvement Low living standards, low GDP per capita, low net portfolio flows, low market liquidity
Zambia
Strengths Relatively high product diversity, high reporting and transparency standards Areas for Improvement Increase in capital restrictions, regulatory system favours large corporations and discourages local businesses, low market liquidity
Source: International Monetary Fund WEO and Article IV, World Bank MEC, National Central Banks, National Finance Ministries, African Development Bank Statistical Yearbook 2017, Barclays Africa Financial Markets Index. Note: Individual category totals (LHS) provide rankings for GDP growth, growth and export market share, debt profile, MPC outcomes transparency, living standards, quality of banks, macro data standards and budget release. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
AFRICA FINANCIAL MARKETS INDEX 2017
AFRICA FINANCIAL MARKETS INDEX 2017
uncertainty and potentially damaging economic shocks. Kenya scores highest for transparency of monetary policy committee decisions and release of budgetary data, while Ivory Coast scores the lowest.
Importance of transparency
The importance of such transparency continues to grow as African countries become more dependent on domestic demand for economic growth.
Despite commodity exports remaining dominant across the continent as a whole, the role of consumption and investment has increased steadily over recent years. With a growing consumer demand in many countries, clear reporting of domestic macro data is an important consideration for foreign investors seeking to invest into such markets.
Demographics are highly favourable, indicating an ever-increasing role for domestic demand in driving the economy: Africa has the fastest growing population of any continent and is already home to more than 1.2bn people. This means that Africa may become a great source of additional labour supply for demographically beset countries in Europe over the next 50 years.
Youngest population
Africa has one of the youngest populations, with a median age of just 15 years old, against a global average of 30 and a European average of more than 40. This contributes to Africa’s high dependency ratio (the ratio of dependents to working-age population), but as these children move into working age, the African continent could experience a demographic dividend leading to higher GDP growth figures.
Although remaining relatively small on a per capita basis, the aggregate demand for consumer goods and services is expected to increase significantly, creating new investment and trade opportunities.
This could support an increase in domestic consumer spending to $2.2tn in 2030 according to some estimates, up from $680bn in 2008. In 2016 private and government consumption (mainly public infrastructure investment) Source: World Bank MEC database, Barclays Africa Financial Markets Index
Figure 5.4: Improving competitiveness boosts merchandise trade market share for most countries Export share, 5-year growth in market share value, %, and export market share, %, 2015
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accounted for more than 60% of GDP growth across Africa (see Figure 5.3).
Taking into account economic performance, financial risks and macro transparency, South Africa, Nigeria, Namibia, Uganda, Morocco and Kenya have the highest scores in Pillar 5, while Ivory Coast, Zambia and Ethiopia have the lowest scores (see Figure 5.2).
As the analysis in Pillar 6 makes clear, legal certainty around enforceability
of financial contracts plays an equally important role in attracting foreign investment.
Enforceability of collateral positions, the existence of insolvency frameworks and commitment to international financial market master agreements all influence the development of financial markets generally. These issues provide a valuable complement to macroeconomic policies.
Figure 5.3: Consumption and investment play a significant role in GDP growthDrivers of growth by economic sector, Africa as a whole, %
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Pillar 6: Legality and enforceability of standard financial markets master agreements
32
Investors globally have sought higher returns than those offered in low-
yielding developed markets by expanding into new locations and accessing a growing range of assets. African financial markets stand to benefit from this trend, but long-term success depends on improving legal and regulatory certainty and boosting market transparency. Pillar 6 assesses the enforceability of collateral and netting and set-off positions across countries, the strength of insolvency frameworks, and the adoption of standard financial markets agreements. This includes the International Swaps and Derivatives Association Master Agreement, the Global Master Repurchase Agreement and the Global Master Securities Lending Agreement.
Commitment to international standard agreements
The ISDA master agreement is designed to enable over the counter derivatives to be documented fully and flexibly, as well as to ensure that collateral and netting and set-off positions are enforced, reducing the credit and legal risk for market participants. Similarly, the GMRA and GMSLA are global agreements governing cross-border repos and securities lending, which are vital to money market and other operations.
South Africa is the only country of the 17 where both netting and set-off and collateral positions are enforced, and the ISDA master capital agreements are widely recognised and implemented. Mauritius ranks second in the index, scoring 93 out of 100, losing some points owing to the limited recognition
of GMSLA and a relatively weaker insolvency framework than that in South Africa (see Figure 6.1).
Kenya, Rwanda, Zambia, Botswana and Ghana generally score well, based on their enforcement of netting and collateral positions.
The lower-scoring countries Ivory Coast, Egypt, Ethiopia and Morocco lack sufficient recognition of the use of the various master agreements assessed. OMFIF and Barclays assume that, as a result of the lack of recognised international standards, their financial markets are subject to their ‘own non-standard’ agreements developed in their jurisdiction, and may face challenges in
compatibility with international market participants which abide by the international standard procedures (see Figure 6.3). This reduces these countries’ overall score within the index.
Insolvency frameworks
The strength of insolvency frameworks, a World Bank measure within the annual Ease of Doing Business report, analyses the time, cost, and outcome of insolvency proceedings for domestic companies and also the strength of their legal framework for liquidation and re-organising proceedings. South Africa and Rwanda score the highest in this indicator, due
Agreements necessary to tackle investor uncertainty
Figure 6.1: Mauritius second to South Africa in financial rulesPillar 6 breakdown: Ranking of individual categories, max = 400 (LHS) Harmonised score, max = 100 (RHS)
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Strengthening the legality and enforceability of rules in financial markets can help attract investors by reducing counterparty risk. The market’s operational infrastructure and performance will improve over time.
PILLAR 6: LEGALITY AND ENFORCEABILITY OF STANDARD FINANCIAL MARKETS MASTER AGREEMENTS
Source: World Bank Ease of Doing Business, Barclays-OMFIF analysis. Note: Individual category totals (LHS) provide rankings for netting and collateral position enforcement, standard master financial agreements and insolvency framework. The harmonised score (RHS) represents the average of all categories’ indicators, and is used to compile the total scores for Pillars 1-6. More information on p.34.
33
Figure 6.2: Enforceability of netting and collateral positions
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Netting and Collateral position enforced
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Figure 6.3: Key financial masters agreements
Source: Barclays, OMFIF survey. Note: Own non-standard master’s agreement used assumed when there is strictly insufficient recognition of the standard agreement perceived.
South Africa Well recognised Well recognised Well recognisedMauritius Well recognised Well recognised Limited useKenya Well recognised Limited use -Rwanda - - -Zambia Well recognised Limited use - Botswana Well recognised Limited use - Ghana Well recognised Limited use - Namibia Well recognised Well recognised Well recognisedTanzania Well recognised Limited use - Nigeria Well recognised Well recognised Well recognisedMozambique Limited use - - Seychelles Limited use - - Uganda Well recognised Limited use - Ivory Coast - - - Egypt - - - Ethiopia - - -Morocco - - -
to the ability of creditors to recover large parts of their investment in the case of insolvency. They also have rules to discourage lenders from issuing high-risk loans and managers and shareholders from taking imprudent loans or otherwise pursuing harmful financial practices.
Ghana’s insolvency framework is the weakest in the index. Despite adhering to international standard master agreements, with the exception of GMSLA, and enforcing netting and collateral positions, it fails adequately to resolve insolvency without incurring high recovery costs for creditors. On average the payment recovery rate is 23 cents on the dollar, 12 cents below that of South Africa.
Most countries need to improve their adherence to international standards of financial agreements. The managing director of a global bank with operations across Africa explains, ‘With regulations, keep it simple: just follow the international norm.’ While some countries fare well on this measure, the underdevelopment of other African countries holds back the region’s ability to expand markets through establishing regional bourses or encouraging cross-border investment. Inconsistent regulations and uneven enforcement are a major handicap for growth. If investors lack confidence in a country’s regulatory and legal framework they will not deploy capital in the market.
“Active regulation and enforcement of existing
rules is needed. Regulators need to be flexible in dealing with the changing financial landscape. Incentives should
be available for creating new financial products as
well as developing existing instruments.”
Analyst, securities firm, Nigeria
ISDA Master Agreement Governs OTC derivatives transactions. The agreement makes transaction netting and close-out easier, allowing for better compatibility between different standards in various jurisdictions.
Global Master Repurchase AgreementDesigned for short-term repos of fixed-income European government bonds that take the form of repurchase agreements between principals under the law of England and Wales.
Global Master Securities Lending AgreementThe GMSLA underpins securities lending arrangements, allowing an agent lender to operate and take responsibility on behalf of a lender, in its activity with borrowers.
Source: Barclays, OMFIF survey.
AFRICA FINANCIAL MARKETS INDEX 2017
34 METHODOLOGY
The Africa Financial Markets Index in focus Using a variety of parameters, both qualitative and quantitative, the Africa Financial Markets Index records the openness and attractiveness of countries across the continent to foreign investment. The index countries are scored on a scale of 10-100 based on six fundamental pillars comprised of over 40 indicators, covering market depth, openness, transparency, legal environment and macro opportunity.
Pillar 1: Market depthPRODUCT DIVERSITY• Type of assets available• Currency availability of stock exchange products• Number of hedging products available
SIZE OF MARKET• Total sovereign and corporate bonds, market capitalisation, ratio to GDP
LIQUIDITY• Total turnover of bonds and equities, ratio to market capitalisation and bonds outstanding
DEPTH• Ability to clear government instruments denominated in local currency in international markets• Existence of secondary market makers (bond market)• Closing auction for fair tradeable market prices
PRIMARY DEALER SYSTEM• Existence of system• Size of repo market
Pillar 2: Access to foreign exchangeNET PORTFOLIO FLOWS, RATIO TO RESERVES• Total net portfolio flows, ratio to foreign exchange reserves
FOREIGN EXCHANGE LIQUIDITY• Interbank market foreign exchange turnover
CAPITAL RESTRICTIONS• Foreign exchange capital controls
OFFICIAL EXCHANGE RATE REPORTING• Quality of data and frequency of publication
• Existence of multiple or unified exchange rate
Pillar 3: Market transparency, tax and regulatory environmentFINANCIAL STABILITY REGULATION• Basel accords implementation stage
QUALITY OF FINANCIAL REPORTING
• Commitment to international accounting and reporting standards (GAAP, IFRS)
TAX ENVIRONMENT• Existence of withholding taxes, special taxes and tax treaties
• Time taken to rebate withholding taxes on investments
FINANCIAL INFORMATION AVAILABILITY• Existence of fixed dates and times for market reporting• Publishing of data on sector and domestic vs non-resident ownership of domestic assets
MARKET DEVELOPMENT• Existence and effectiveness of Capital Markets Association• Existence and strength of rules protecting minority
shareholders
• Existence of sovereign rating (Fitch, Moody’s, S&P)
• Number of corporate ratings issued (Fitch, Moody’s, S&P)
Pillar 4: Capacity of local investorsLOCAL INVESTOR ASSET CONCENTRATION• Value of pension assets per capita
• Pension and insurance fund assets, ratio to total market
capitalisation of equities and bonds listed on exchanges
Pillar 5: Macroeconomic opportunityGDP GROWTH• Composite five-year historical GDP average (2011-16) and
five-year forecast (2017-22)
LIVING STANDARDS• GDP per capita
COMPETITIVENESS• Absolute export market share and growth in export market
share over past five years
MACROECONOMIC DATA STANDARDS• Availability and frequency of GDP, inflation and interest rate
data
BUDGET RELEASE• Regular release of budget
35
Pillar 5 cont.MPC OUTCOMES TRANSPARENCY• Frequency and regular publishing of MPC decisions and
meeting schedules
DEBT PROFILE• External debt-to-GDP
QUALITY OF BANKING SECTOR ASSETS• Non-performing loans ratio
Pillar 6: Legality and enforceability of standard financial markets master agreements
NETTING AND COLLATERAL POSITIONS • Enforced netting and collateral positions
USE OF FINANCIAL MARKET MASTER AGREEMENTS • Use of ISDA master agreements, GMRA, GMSLA or own non-standard agreements
INSOLVENCY FRAMEWORK • Strength of insolvency frameworks, World Bank score
Methodology
Pillars and indicators
The index scores each country based on six pillars: market depth; access to foreign exchange; market transparency, tax and regulatory environment; capacity of local investors; underlying macro opportunity; and the legality and enforceability of standard master financial agreements. Pillars are built from a set of key indicators listed on page 34.
Each individual indicator is weighted equally in each pillar, and each pillar is weighted equally in the overall index score.
Data and survey
The data informing the scores for each pillar and their indicators stem from a mixture of quantitative and qualitative analysis. The quantitative data collected are of the latest year available, 2016 or 2015 figures. In cases where the data refer to current conditions, such as for the Basel implementation stages, international accounting standards, and credit ratings, the data are as of mid-September 2017.
The survey element provides both quantitative and qualitative data relating to legal, regulatory and market conditions in each of the countries, such as information on tax environment, as well as responses based on country experiences.
The survey was conducted between July and September 2017, covering 60 institutions operating throughout Africa. Participants include chief executives, managing directors, managing partners or country experts across a range of
global, regional and local institutions, including banks, securities exchanges, regulators, asset managers and investors.
Harmonisation and scoring
Raw data are harmonised on a scale of 10-100 to allow comparability between indicators.
Outliers in the raw data falling above or below two standard deviations of the mean are accounted for during the scoring. In the case of an outlier greater than the upper-bound, its value is replaced by the next-highest data point in the sample. This means indicators can have more than one country scoring maximum points.
In the rare case of missing data, data points are modelled to smooth gaps and ensure the overall pillar score is not affected. The proxy value takes the average of the remaining harmonised scores for the country across all its indicators in the pillar, ensuring the final pillar score is not skewed by a missing value.
The scoring of each indicator and pillar works under the same process. Once indicators have a harmonised score, the average is taken across each indicator in a pillar to create the overall pillar score. Similarly pillar scores are averaged to create the country’s composite score.
How to get full marks
As the index is a comparison of a country’s financial market against the selected sample, a country can reach the maximum score of 100. In such a scenario, the country must achieve the maximum score of 100 in all six pillars.
AFRICA FINANCIAL MARKETS INDEX 2017
Official Monetary and Financial Institutions Forum
30 Crown Place, London, EC2A 4EB United KingdomT: +44 (0)20 3008 5262 F: +44 (0)20 7965 4489www.omfif.org @OMFIF
Barclays Africa Group Limited
15 Troye Street, Johannesburg, 2001 South AfricaT: +27 (0) 11 350 4000www.barclaysafrica.com @BarclaysAfrica
Barclays Africa Group Limited is not affiliated with Barclays PLC