Absa Index: African Financial Markets Hit Decade-High Score of 56 as 20 Economies Cut InflationAbsa Index: African Financial Markets Hit Decade-High Score of 56 as 20 Economies Cut Inflation

The tenth Absa Africa Financial Markets Index puts the average score across 29 economies at 56 out of 100, according to OMFIF the think tank that compiles it with Absa. That is six points above the first edition in 2017, and the index covers about 80% of the continent's population and economic output.

What the 2026 index measures

The index ranks countries on six pillars: market depth, access to foreign exchange, market transparency, pension fund development, the macroeconomic environment, and the legal, tax and regulatory setting.

Scores are set against a fixed reference point that represents achievable good practice, so a country improves by closing the gap rather than by beating its neighbours. OMFIF's report page says the study has the support of the United Nations Economic Commission for Africa.

South Africa remains the leading market, helped by the scale and liquidity of its capital market and its mix of products. Mauritius stays among the strongest performers on the strength of its open financial system and legal framework.

Macroeconomic scores lift the average

The macroeconomic pillar did much of the work. All 29 countries recorded stronger scores for GDP growth, inflation declined in 20 economies, and external debt as a share of output improved in 20.

Market products also widened. Twelve countries improved their product diversity scores, 19 reported environmental, social and governance initiatives, and 11 introduced climate stress testing, including Benin, Seychelles and Tanzania. Egypt was cited for derivatives and alternative-investment initiatives, and Kenya for infrastructure-backed securities, which is one of the wider product offerings on the continent.

For Kenyan savers and companies, those products matter because they give pension funds and banks more places to put money than government paper alone. Mwenendo earlier reported on how Kenyan banks disbursed a record KSh 99.40B in September, showing how much credit flows through the banking system rather than capital markets.

Reforms and the limits of expansion

Nigeria introduced mark-to-market valuation for fixed-income collective investment schemes and a new commercial-paper listing and trading platform. Namibia has built one of sub-Saharan Africa's largest pension industries relative to the size of its economy.

Claver Gatete of the UN Economic Commission for Africa said that "market expansion and market development are not the same", a warning that more listings and products do not by themselves deliver deeper, more liquid markets. OMFIF chair David Marsh said Africa "has shown merit and maturity in advancing towards greater self-sufficiency."

Headwinds that could stall progress

The index also lists risks: wars in Russia-Ukraine and the Middle East, high oil prices and strained relations among major economic blocs. As Mwenendo earlier reported, the IMF has warned that energy and debt risks remain, and the Central Bank of Kenya held its benchmark rate at 8.75% this month as inflation ticked up.

The practical test is whether better scores translate into cheaper capital. Anthony Kirui of Absa put the case for investment in markets plainly: "If you build it, they will come."