Bank of Tanzania Governor, Prof. Florens Luoga (5th left), and Absa Tanzania Managing Director, Abdi Mohamed (4th left), launch the 2021 Absa Africa Financial Markets Index Report in Dar es Salaam. Looking on from left are, Absa Group Head of Macro and Fixed Income & Currencies, Jeff Gable, Absa Global Markets Director, Esther Maruma, CMSA Chief Executive Officer, Nicodemus Mkama, Ministry of Finance Deputy Permanent Secretary – Economic Management Policies, Lawrence Mafuru, Absa Board Chairman, Simon Mponji, NBC Bank Managing Director, Theobald Sabi and Absa Compliance and Legal Director, Irene Sengati-Giattas.
Bank of Tanzania (BOT) Governor, Prof. Florens Luoga (centre), is rewarded by Absa Bank Tanzania Board Chairman, Simon Mponji, as Absa’s token of congratulations for his recent winning of the Central Banker of the Year Award for Africa 2021, issued by The Banker Magazine shortly after the BOT Chief officiated at the launch of the 2021 Absa Africa Financial Markets Index Report in Dar es Salaam. Looking on is Absa Bank Tanzania Managing Director, Abdi Mohamed.
Absa Bank Tanzania has launched the Fifth Africa Annual Africa Financial Markets Index (AFMI) 2021 at an event officiated by the Governor of Bank of Tanzania, Prof. Florens Luoga. The event held in Dar es Salaam brought together financial markets stakeholders and regulators and was attended by the Deputy Permanent Secretary Ministry of Finance – Mr Lawrence Mafuru , the Chief Executive Officer CMSA, Country Representative International Finance Corporation and CEO’s from Private Sector Organisations.
The AFMI is an initiative of Absa Group in partnership with OMFIF (Official Monetary and Financial Institutional Forum) and provides a dataset (or information repository) that allows for sharing of best practice and objective comparison across different markets. The intent of the AFMI report is initiate and facilitate productive discussions amongst players in the financial sector. The starting point for the Absa Financial Markets Index (AFMI) is to support effective financial market development, with the core target of the Index being to facilitate the right conversations, among all financial markets’ stakeholders, in ensuring that Africa is well placed to attract global capital. The index successfully captures a huge mix of African economies from Seychelles to Nigeria, while the Eastern parts of the continent are represented by Tanzania, Kenya, Ethiopia, Uganda, and Rwanda. As a reflection of the global push towards sustainability, this is the first year that the index has included ESG indicators. The availability of sustainable finance products, such as green bonds and equities, now contributes to countries’ scores.
Speaking at the launch event the Governor, BOT congratulated Absa on the launch of the fifth AFMI report and encouraged financial sector participants to continue developing products and solutions that expand and deepen the financial markets. While recognising the great progress made in maintaining a stable macro-economic environment, the Governor urged stakeholders to maintain the good efforts and collaborate closely with the regulator in the achievement of the government’s agenda for growth and development. The Governor emphasized the significant role a vibrant financial sector plays in creating wealth and properity.
“This initiative provides alternative credible assessment of our own country”, said Prof. Luoga.
While welcoming the Governor’s remarks Abdi Mohamed the Managing Director Absa Tanzania recognized the great effort and collaboration in the Tanzania market that has ensured a resilient economic performance in the midst of the Covid pandemic. “Absa will continue to work closely with the BOT and other financial sector stakeholders in the development and enhancement of the financial markets” he stated.
Speaking at the same event, Jeff Gable, Absa Group Head of Macro & Fixed Income & Currencies (FIC) Research commented on Tanzania’s resilient macro-economic performance during the pandemic, sharing data that shows Tanzania’s growth was the strongest in the E.A region. The TZS also showed a stable performance against the dollar with minimal movements recorded during the period covered by the AFMI report. Additionally, the report also commented positively on Tanzania’s debt sustainability relative to regional peers. Commenting on the report he stated “we believe that African regulators, policymakers, exchanges, the providers of capital and the users of capital are best served by a financial market ecosystem that is characterized by Openness, Transparency and Accessibility”
Tanzania showed significant improvement in a number of the key pillars covered by the AFMI report. Tanzania recorded a “top-riser” status in the size and liquidity of financial markets, the ease of moving capital, regulatory frameworks and overall macro performance of the economy.” Tanzania has one of the highest scores for fully implementing International Financial Reporting Standards, which positively impacted the outcome of Pillar 3, which gauges Market Transparency, however new indicators, that score countries on policies that promote ESG initiatives in financial markets, that weighed down pillar 3 scores across more than 50% of the countries,” said Esther Maruma. “Tanzania’s score is expected to improve further next year with the recent introduction of a ‘Horizontal REPO’ trading platform” said Esther Maruma, Director, Global Markets, Absa Bank Tanzania, during the presentation of the report.
Through an effective response to the pandemic, Tanzania showed significant improvement along most measures for success in Pillar 5, which covers Macroeconomic Opportunity. Availability of stronger data standards and having one of the lowest external Debt to GDP ratios improved Tanzania’s ranking.
Charles Russon, Chief Executive of Corporate and Investment banking, Absa Group, said of the index’s findings: “While some might find it disheartening to see the average score across the board drop, Africa is navigating an extremely tricky economic atmosphere. Recovery from the Covid-19 pandemic has not been as straightforward as we would have hoped last year, and this has had a large impact on the twin challenges the continent faces in reinvigorating financial markets post-pandemic, while strengthening market infrastructure.’
“However,” he continued, “We’ve seen a lot of positive progress in countries’ efforts to upgrade market infrastructure and regulatory support through the development of technology-based tools which will help future-proof Africa’s financial markets. With countries using innovation to boost local markets and build a broader investor base, there are plenty of reasons to be hopeful about the future of Africa’s macroeconomic landscape.”
The current AFMI edition is part of Absa’s commitment to support financial sector, as the continent seeks to recover from the ravages of the global pandemic, by providing awareness of the current situation across countries and potentially, shade some light on the importance of effective financial markets as an enabler to access capital necessary to improve the lives for all Africans. It was launched in October 2021 at the IMF/ WB Annual Meetings, covered 23 countries (up from an initial 17), about two-thirds of the continent’s population and more than three quarters of its GDP.
“The index is evolving to stay relevant, recognising the greater role that sustainability plays in market development, as well as the importance of mitigating climate-related risks to the financial system, especially for African countries that are more vulnerable to the effects of environmental deterioration,” said David Marsh, chairman of OMFIF. “Innovations in sustainable finance and market infrastructure will be critical to ensuring that African markets remain competitive and future-proof.”
For more information, please contact:
Aron Luhanga
Head of Marketing and Corporate Relations
Absa Bank Tanzania Limited
+255 768 221 717
About The Index:
The 23 countries covered by the index are Angola, Botswana, Cameroon, Egypt, Eswatini, Ethiopia, Ghana, Ivory Coast, Kenya, Lesotho, Malawi, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Tanzania, Uganda and Zambia.
The index evaluates countries across six pillars: market depth; access to foreign exchange; market transparency, tax and regulatory environment and market transparency; capacity of local investors; macroeconomic opportunity; and enforceability of standard master agreements.
In addition to quantitative analysis, OMFIF surveyed more than 50 policymakers and top executives from financial institutions operating across the 23 countries, including banks, investors, securities exchanges, central banks, regulators, audit and accounting firms and international financial and development institutions.
About Absa Bank Tanzania
Absa Bank Tanzania Limited is a leading commercial bank in Tanzania that currently boasts a network of 15 branches and 62 ATMs strategically located countrywide – 21 at all our branches and 49 offsite.
The Bank is a wholly owned subsidiary of Absa Group Limited. Absa Bank Tanzania Limited, (registered number 38557), is regulated by the Bank of Tanzania.
About Absa Group Limited
Absa Group Limited (‘Absa Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups.
Absa Group offers an integrated set of products and services across personal and business banking, corporate and investment banking, wealth and investment management and insurance.
Absa Group has a presence in 12 countries in Africa
The Group’s registered head office is in Johannesburg, South Africa, and it owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa Bank), Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda and Zambia.
The Group also has representative offices in Namibia and Nigeria, as well as insurance operations in Botswana, Kenya, Mozambique, South Africa, Tanzania and Zambia, and an International Representative Office in London and New York.
For further information about Absa, please visit our website www.absa.africa
