fbpx

ABSA AFMI shows a decline in South Africa’s Economy

  • During a presentation of study results by an Absa panel of experts on Wednesday morning, the performance of the South African economy was declared to be diminishing.
  • The panel stated during the presentation that South Africa’s total score declined from 80 out of 100 in 2020 to 83 in 2021.
  • According to the experts, even if South Africa performed better than most African countries, it appears that it is still insufficient for local investors to invest in the country.
  • The study also identified other weak economies on the continent.
  • Only seven of the 23 countries managed to score quite well, which should be cause for alarm.

Prior to the COVID19 epidemic, the South African economy was doing well due to its robust, stable financial markets and efficient regulation that encourages investment. However, during a presentation of study results by an Absa panel of experts on Wednesday morning, the performance of the South African economy was declared to be diminishing.

The experts’ analysis is based on the Absa African Financial Markets Index, which assesses financial market growth in 23 nations and identifies economies with the most conducive climate for effective markets. The research aims to identify economies’ existing circumstances as well as areas in which economies might improve market frameworks to boost investor access and long-term growth.

The panel stated during the presentation that South Africa’s total score declined from 80 out of 100 in 2020 to 83 in 2021. They emphasized that this result was mostly attributable to the impact of the COVID 19 pandemic on the country’s commercial climate and general economy. The panel, on the other hand, stated that the pandemic affected not only South Africa, but all of the other countries assessed in the study.

The study was conducted in collaboration with the Forum of Official Monetary and Financial Institutions (OMFIF). In their analysis, the organizations rely on data from central banks, stock exchanges, and international financial agencies such as the IMF.

According to the experts, even if South Africa performed better than most African countries, it appears that it is still insufficient for local investors to invest in the country. They argued that this is evidenced by a huge outflow of money abroad and a preference for investments in items with global exposure over those with local exposure.

The study also identified other weak economies on the continent. It asserted that the current condition of these countries was primarily due to the terrible economic impact of the COVID 19 pandemic. Ethiopia was among them, with a score of 25, just ahead of Cameroon (29), Lesotho (30), Angola (33) and Senegal (34). Only seven of the 23 countries managed to score quite well, which should be cause for alarm.

The index evaluates a country’s market depth, access to foreign exchange, market transparency, tax and regulatory environment, market transparency, macroeconomic potential, local investor capability, and financial contract enforceability.

The Absa African Financial Markets Index has become an essential economic indicator that investors and politicians alike utilize in making economic and investment choices, according to Jason Quinn, interim CEO of Absa Group.

“The index tracks countries’ openness to foreign investment and is an objective gauge of the attractiveness of Africa’s capital markets, designed for use by policymakers, investors, and asset managers worldwide,” he added.

Sponsored

Open a free trading account today

Open a Live Trading Account Today, Get Free Daily Trading Signals. Open your trading account right now and get your financial trading journey started with this great broker. No commissions, get 24 hour withdrawals with this award winning platform.

Staff Writer

Scroll to top
Need help getting rid of your debt?Fill this form and get help instantly!