Tanzania excels in Absa Financial Markets Index
DAR ES SALAAM: TANZANIA has secured third place in macroeconomic environment and transparency, according to the Absa Africa Financial Markets Index (AFMI) 2024.
The latest report, released yesterday, shows the country scoring 85 out of 100 points, outperforming some of its East African counterparts including Kenya (76 points) and Rwanda (80 points). Botswana topped the category with 88 points, followed by Uganda at 87 points.
The country’s impressive score is attributed to greater transparency, including public access to the monetary policy meeting schedule, low inflation and a reduced nonperforming loan ratio.
The report highlights that Tanzania has improved monetary policy transparency by publicly scheduling key meetings, ensuring investors have access to critical financial information.
“This transparency allows investors to make informed decisions and enhances confidence in the country’s financial markets,” the report states.
The macroeconomic environment and transparency pillar evaluates financial market accessibility, openness and transparency, which are essential for economic growth.
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Bank of Tanzania (BoT) Governor, Mr Emmanuel Tutuba, said that the report reflects the government’s commitment to developing a robust financial market ecosystem.
“It provides a comprehensive analysis of the financial markets across the continent, highlighting Tanzania’s strengths and areas for improvement,” he said.
He added that financial market transparency is the foundation of a healthy economy, as it boosts investor confidence, attracts foreign investment and drives economic growth.
Additionally, the Absa Tanzania’s Managing Director, Mr Obedi Laiser, said that since its inception in 2017, the index has been instrumental in evaluating financial market accessibility and openness, ultimately driving progress in capital market development.
“Financial markets play a crucial role in economic growth. By conducting these studies, we aim to compare financial standards and motivate central banks to formulate policies that enhance market efficiency,” he said.
Beyond macroeconomic transparency, the AFMI 2024 report assesses other five additional pillars of market depth, access to foreign exchange, pension fund development and legal standards. In market depth, Tanzania ranked 7th with 49 points, outperforming Uganda (46), Kenya (38) and Rwanda (33).
The country’s gains were driven by corporate bond issuances worth 300 million US dollars and the introduction of ESG-linked and Islamic financial instruments.
Equally, in Access to Foreign Exchange pillar, the country secured 10th place with 60 points, an increase from 53 points.
This improvement was fuelled by the BoT’s publication of the Interbank Foreign Exchange Market Code of Conduct, aligning with 52 out of 55 FX Global Code principles
