The fourth edition of Absa Africa Financial Markets Index 2020 show Kenya has dropped four places.
The index that measures the capacity of countries to attract both local and foreign investments, shows that Kenya has lost seven points to score 58 out of 100 points hence placing it at the seventh position.
The countries that were ahead of kenya were South Africa and Mauritius which scored 89 and 79 points respectively followed by Nigeria,Botswana,Namibia and Ghana.
The report, by Absa Group and Official Monetary and Financial Institutions Forum, rates countries based on six pillars which include; market depth, access to foreign exchange and market transparency, tax and regulatory environment, capacity of local investors, macroeconomic opportunity and legality and enforceability of standard financial markets master agreements.
According to the report Kenya dropped from 65 points in 2019 to 58 points this year in foreign exchange pillar hence contributing to the overall drop in position. The Foreign exchange pillar evaluates a country’s openness to foreign investment based on the ease of moving capital, flexibility of foreign exchange regimes and availability of reliable foreign exchange data.
The drop can be attributed to the high cases of COVID-19 recorded in Kenya that had a negative impact on the economy.
The Absa index allows for cross country comparisons, opening policy discussions between regulators, capital markets, investors and corporates on how to build markets that can mobilise capital and promote investment.
