Nigeria ranks 11th in capacity of local investors across Africa- Report
Amongst 17 African countries analysed recently in the Barclays Africa Group Financial Markets Index, Nigeria has been ranked 11th in terms of the capacity of local investors.
The Barclays Africa Group Financial Markets Index evaluates financial market development in 17 countries, and highlights economies with clearest growth prospects, in a report to show not just present positions but also how economies can improve market frameworks to meet yardsticks for investor access and sustainable growth.
The report obtained by our correspondent via the official website of Official Monetary and Financial Institute Forum (OMFIF) assessed countries according to six pillars: market depth; access to foreign exchange; tax and regulatory environment and market transparency; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts, collateral positions and insolvency frameworks.
The lowest amongst these rankings for Nigeria was on the capacity of local investors which placed countries such as South Africa, Namibia, Botswana, Mauritius, Kenya, Tanzania, Morocco, Egypt, Seychelles, Mozambique ahead of the giant of Africa.
The metric, examined the size of local investors, assessing the level of local demands against supply of assets available in each market.
A breakdown of other metrics showed Nigeria at 6th position in terms of Market depth, 8th position in terms of Access to foreign exchange, and 3rd position in terms of Market transparency, tax and regulatory environment.
Nigeria’s capital market was used as a benchmark for Market transparency, tax and regulatory environment. In his comment, the Managing director, the multinational bank said “The Nigerian stock exchange is a good example for others in terms of the quality of reporting and regulatory frameworks. If others adopt this approach, that would make a big difference.”
Nigerian ranked 2nd in Macroeconomic opportunity and 10th position in Legality and enforceability of standard financial markets master agreements.
Overall, the report identified Low FX restrictions, high market transparency, high domestic investor assets, low debt-to-GDP ratio s Nigeria’s strengths and highlighted the economy’s high exposure to commodity prices, weak insolvency framework as areas for improvement.
The report posited that the Nigerian economy has good prospects but improvements in transparency are needed for desired development.
According to the report, the 17 markets surveyed with an intention to track progress annually, by supplying a toolkit for countries wishing to build financial infrastructure were Botswana, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Tanzania, Uganda, and Zambia.
The index ranked the maturity, openness, and accessibility of 17 financial markets in Africa based on both qualitative and quantitative criteria.
