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Top 10 African Countries With the Most Developed Financial Market

South Africa, Mauritius and Nigeria maintained their first to third positions respectively in 2022 Africa’s Most Developed Financial Market. 

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Traders Wall Street

South Africa, Mauritius and Nigeria maintained their first to third positions respectively in 2022 Africa’s Most Developed Financial Market. 

According to a report released by Absa Group, South Africa, Mauritius and Nigeria are the top three most developed financial markets in Africa.

The analytical report “Absa Africa Financial Markets Index, 2022” which was done in conjunction with The Official Monetary and Financial Institutions Forum, (OMFIF) evaluates financial market development in 26 African countries. 

Investors King understands the report highlights economies with the most supportive environment that could enhance market performance using six pillars; access to foreign exchange; market transparency, tax and regulatory environment; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts.

According to this year’s report, Namibia, Uganda and Kenya featured among the countries with the greatest increase in overall scores. The three countries are recognised for the work done to improve their environmental, social and governance market frameworks. 

For instance, the Government of Kenya has incorporated climate risks into the financial stability regulation. 

A full list of the countries that appeared on this year’s ranking includes South Africa which came first with an overall score of 88 points, dropping 2 points when compared with 90 points the country had in 2021.

Mauritius was ranked second with an overall score of 76 points, the same point the small country along the Indian ocean had in 2021. Nigeria also maintained its third position with 69 points while adding 2 points to the 67 points it had in 2021.

Other countries on the list include Uganda which has 66 points to emerge fourth, bagging additional six points from the 60 it had in 2021. Botswana ranked fifth with 66 points, adding four points from the 62 points it recorded in 2021. 

Featuring on the top ten list include Namibia, Ghana, Kenya, Morocco and Egypt which ranked 6th, 7th, 8th, 9th and 10th respectively. 

Below is a top 10 list of Africa’s Most Developed Financial Market

         Country                        2022.        2021.   

  1. South Africa.              88.            90.     
  2. Mauritius.                  76.             76. 
  3. Nigeria.                       69.            67. 
  4. Uganda.                       66.            60.  
  5. Botswana.                   66.            62. 
  6. Namibia.                     65.            58. 
  7. Ghana.                         65.            64.  
  8. Kenya.                          61.            65. 
  9. Morocco.                      60.            56. 
  10. Egypt.                           57.            56. 

 

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Finance

Government Revenue Surges to N2.07trn in January 2024, FAAC Discloses

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FAAC

The Federal Accounts Allocation Committee (FAAC) has revealed a significant surge in government revenue to N2.07 trillion in January 2024.

This substantial increase reflects the buoyancy of Nigeria’s economic activities despite various challenges faced by the nation.

According to FAAC’s communiqué issued after its monthly meeting in Abuja, the N2.07 trillion revenue was distributed to meet the financial needs of the federal, state, and local governments.

N1.15 trillion out of the total revenue was disbursed to the various tiers of government, indicating a robust financial inflow.

The breakdown of the revenue distribution showcased that the Federal Government received N407.267 billion, state governments obtained N379.407 billion while N278.041 billion was disbursed to local governments.

Also, N85.101 billion, equivalent to 13% of mineral revenue, was allocated to the states as derivation revenue.

FAAC also highlighted that the revenue composition included N463.1 billion from distributable statutory revenue, N391.8 billion from distributable Value Added Tax (VAT) revenue, N15.9 billion from Electronic Money Transfer Levy revenue, and N279.03 billion from exchange difference revenue.

Despite the impressive revenue figures, FAAC noted a decrease in VAT collection by N71.7 billion compared to the previous month.

This decrease suggests fluctuations in consumer spending and economic activities, which could be influenced by various factors such as policy changes, economic conditions, and consumer sentiment.

Furthermore, FAAC reported increases in revenue from Companies Income Tax, Import Duty, Petroleum Profit Tax, and Oil and Gas Royalties.

However, revenue from Value Added Tax, Export Duty, Electronic Money Transfer Levy, and CET Levies experienced declines during the period.

FAAC’s disclosure of the January 2024 revenue underscores the importance of prudent financial management and effective allocation of resources to drive sustainable economic growth and development in Nigeria.

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Finance

Private Sector Credit Hits Record High of N76.94 Trillion in January 2024 – CBN Report

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Private employers

Private sector credit in Nigeria reached a record N76.94 trillion in January 2024, according to the latest report from the Central Bank of Nigeria (CBN).

This represents a 85.2% year-on-year increase from N41.54 trillion reported in January 2023.

The CBN’s Money and Credit Statistics report unveiled that credit to the private sector experienced a substantial month-on-month surge of 23.06%, or N14.42 trillion, from N62.52 trillion in December 2023.

This surge occurred amid the implementation of the CBN’s policy to unify the naira exchange rate.

Analysts attribute the reported N76.94 trillion credit to the private sector to the recent depreciation of the naira against foreign currencies.

The naira closed at N1,356.88 per dollar in January 2024, representing a 50.87% decline or N457.49 against the dollar compared to December 2023.

This depreciation compelled banks to extend credit to major corporations to meet the CBN’s mandated Loan-to-Deposit Ratio (LDR) threshold.

The CBN’s decision to resume the enforcement of the LDR policy, effective July 31, 2023, further propelled banks to increase lending to customers, stimulating the real sector of the economy.

With the CRR mechanism updated, banks with an LDR below the prescribed level faced a 50% lending shortfall penalty.

Experts suggest that the significant increase in private sector credit underscores the growing need for businesses to secure funds amidst economic uncertainties and exchange rate volatility.

It also signifies banks’ efforts to comply with regulatory requirements and support economic growth initiatives.

As Nigeria navigates its economic landscape, stakeholders anticipate further developments in credit dynamics and monetary policies to sustain financial stability and stimulate economic expansion.

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Senate Initiates Probe into N30tn Ways and Means Loans under Buhari Administration

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Muhammadu Buhari

The Nigerian Senate has embarked on a comprehensive investigation into the disbursement and utilization of the N30 trillion Ways and Means loans obtained by the Central Bank of Nigeria (CBN) during the administration of former President Muhammadu Buhari.

The Ways and Means facility allows the CBN to provide financial support to the government to cover budget shortfalls.

The decision to probe the massive loans comes amid concerns about the transparency and accountability surrounding the utilization of these funds, particularly as the country grapples with economic challenges, food crises, rising inflation, and worsening insecurity.

The Senate’s investigation aims to shed light on how the substantial overdrafts from the CBN were acquired and expended under the leadership of former President Buhari.

There is growing apprehension that the indiscriminate spending of the overdrafts, particularly during Godwin Emefiele’s tenure as CBN governor, may have contributed significantly to the current economic predicament facing the nation.

The probe will delve into the details of the N30 trillion overdrafts, with a specific focus on examining the purpose for which the funds were allocated and how they were utilized.

Also, the Senate will scrutinize the N10 trillion disbursed under the Anchor Borrowers Scheme, as well as the utilization of $2.4 billion out of the $7 billion earmarked for forex transactions.

The initiative underscores the Senate’s commitment to ensuring transparency, fiscal responsibility, and prudent financial management in the country’s economic affairs.

It is anticipated that the probe will unearth vital insights into the financial transactions of the past administration, enabling corrective measures to be taken to address any mismanagement or discrepancies discovered.

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