Tanzania is likely to attain the needed progress in the financial sector if it is able to ensure that it implements the six pillars identified in the Absa Africa Financial Market Index 2022.
The Deputy Permanent Secretary-Economic Management Policies, Ministry of Finance and Planning Mr Lawrence Mafuru, said at the launch of the report on Wednesday in Dar es Salaam that highlights six important pillars if African countries are to accelerate in development.
“The six pillars are useful and will complement well the efforts Tanzania is making to boost its financial sector to the highest level and enhance its contribution to economic growth,” he said.
The six pillars include market depth, access to foreign exchange, market transparency, tax and regional environment, the capacity of local investors, macroeconomic environment and transparency and legal standards enforceability.
The Absa Africa Financial Markets Index, however, showed improving market infrastructure in the majority of countries in the region.
The PS said the report which had already been made an official report by the Central Bank, was likely to help the government when looking at its policies and intervention in the country.
According to him, the report will go a long way towards positioning the country in liberalising the financial markets and innovating products and solutions that are available to local and international investors.
For his part, Absa Bank’s Finance Director, Mr Obedi Laiser said the report provides an overview of the state of financial markets in Africa and identifies the main impediments to their development.
According to the Absa Africa Financial Markets Index 2022, African countries have responded positively to the need to develop domestic financial markets to protect economies from external shocks.
“Even as challenging market conditions weighed on performance in the index, 19 of the 26 countries improved their scores relative to last year,” the report said.
It further said that this was largely due to broad-based progress in developing sustainable financial markets, which is becoming increasingly important to global investors.
Namibia, Uganda, and Kenya are among the countries with the most significant increase in scores as they have bolstered their environmental, social and governance market frameworks and, in Kenya, climate risks have been incorporated into financial stability regulation.
Greater product diversity has lifted scores for most countries too, including Angola and Lesotho which both issued their first initial public offerings over the past year, according to the report.
The Absa Africa Financial Markets Index, now in its sixth year, presents a broad view of financial market progress. The index continued to evolve this year.
