(Bloomberg) -- Africa’s financial markets are expanding at the fastest pace in seven years, as the continent benefits from a recovery in economic growth and slowing inflation.
Out of the 29 countries covered by Absa Group Ltd.’s latest Africa Financial Markets Index, 23 improved their scores relative to last year as the value of pension fund assets grew, foreign exchange reserves improved and access to global capital markets was selectively restored.
“This is a welcome respite after several difficult years during which the continent faced first the challenges of the global Covid-19 pandemic, then higher domestic inflation and financing costs,” Absa interim Chief Executive officer Charles Russon said in the report Thursday.
Last year the continent’s markets shrank in the face of headwinds including high interest rates to counter rising inflation and weaker regional currencies, as well as ongoing fallout from Russia’s invasion of Ukraine.
The International Monetary Fund expects sub-Saharan African economies to grow at 3.6% in 2024, matching last year’s pace, and advancing to 4.2% in 2025.
The Absa index, which was launched in 2017, found securities markets posted higher activity and transparency in currency markets in Egypt, Ethiopia and Nigeria improved after they moved freely-floating regimes.
Other Key Findings:
- The top five performers in the index remained South Africa, Mauritius, Nigeria, Uganda and Namibia.
- Botswana moved up one places to number six, Ghana dropped to seventh, and Kenya, Morocco and Zambia. closed out the top 10.
- Egypt remained at number 11, while Ethiopia was in last place.
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