Page 150 - Risk Report 2024

IRMSA
150 RISK REPORT 2024/25

SADC financial market development

The 2023 AFMI compiled by (OMFIF), scores 28 African countries’ financial development based on measures of
market accessibility, openness and transparency, using over 40 indicators across 6 pillars. The Index aims to
demonstrate how countries can reduce barriers to investment and boost sustainable growth and is used by
policymakers and the investment community to gain insights on development and gauge African countries’
market infrastructure. Scores for SADC countries rated in the 2023 Index, are as follows:

Source: Absa Africa Financial Markets Index – OMFIF (2023). Pillar scores are based on countries’ relative performance for each
indicator, rebased to minimum 10 and maximum 100. The overall index score per country is calculated as an average of the scores
from each pillar.

Of the 28 countries covered by the 2023 AFMI, 6 of the 16 SADC countries measured ranked in the top 10. The
report also highlights the following:
• Market developments and policy changes have boosted growth of financial markets across Africa.
• Progress over the last 2 years have been encouraging, and countries (included in the report) are more
resilient; global shocks such as COVID-19, geopolitical conflicts, food and energy security issues, and rising
inflation may have derailed or delayed important advances in capital markets.
• More than 20 AFMI countries now have some form of ESG linked financial policies which might help to mobilise
new investment.

Key take away for risk professionals

Africa presents various challenges to potential foreign investors. For this reason, risk professionals must lead or
participate constructively in all investment due diligence assessments to respond adequately to investment risks.
Examples of risks include the following:

Source: WEF Global Risk Report (2024).