Tanzania excels in Absa financial market index

DAR ES SALAAM: TANZANIA has topped other East African countries in financial market depth thanks to the corporate and government bonds issuance, according to the Absa Africa Financial Markets Index (AFMI) 2023.

The market depth, according to the index, evaluates countries’ financial development based on measures of market accessibility, openness, and transparency.

The AFMI 2023 report released on Wednesday showed that out of 100 points, Tanzania scored 49 in the market depth beating other EAC countries such as Uganda which scored (46), Kenya (42), and Rwanda 31 points.

South Africa leads the table with 100 points. The report, based on the six pillars, said the country’s market depth was pushed by mainly corporate bonds – CRDB’s green bond, the first largest in Sub-Saharan Africa, and KCB Tanzania’s Fursa Sukuk.

Additionally, the slight improvement in market size has been attributed to the increase in the listed government bonds which rose by 19 per cent year on year to 8.1 billion US dollars (some 20.2tri/-) by last June.

Furthermore, out of 28 countries surveyed, Tanzania holds the 6th position in the market depth pillar above all EAC countries. South Africa leads with 100 points followed by Morocco (60), Nigeria (56), Mauritius (56), and Botswana with 54 points while Uganda holds the 8th, Kenya at 11 and Rwanda holds 16 positions.

The overall performance of the country in the report which was conducted for the seventh time made the country move up by two places to 10th from 12th in the previous index.

Absa Group’s Head of Research Mr Jeff Gable said during the report launching that the country’s overall score rose by a half point to 55.5 points this year from 55 last year.

“The six pillars covered were market transparency, tax and regulatory environment, macroeconomic environment and transparency, access to foreign exchange, capacity of local investors, and legal standards and enforceability,” said Mr Gable.

Bank of Tanzania (BoT), Deputy Governor, Economic and Financial Policies, Dr Yamungu Kayandabila, said the country’s financial markets performance is making significant strides in enhancing financial market ecosystems. “This report provides us with a comprehensive analysis of the continent and Tanzania’s financial markets performance, highlighting the country’s strengths and areas for improvement,” said Dr Kayandabila who represented the BoT Governor.

“The country has made significant strides in enhancing its financial market ecosystem, as evidenced by its improved score in the index.”

The Deputy Governor added that the overall performance in financial market transparency is the bedrock of a healthy financial market, as it fosters investor confidence, attracts foreign investment, and promotes economic growth.

Absa’s Director of Global Markets, Esther Maruma who represented the lender’s Managing Director said since its launch in 2017, the index focused on identifying key issues such as market accessibility, openness, and transparency purposely to measure progress in the development of capital markets to attract international investments.

The report’s aim is to show how economics can reduce barriers to investment and boost sustainable growth