The Absa Africa Financial Markets Index has reported significant market developments in 2024, with South Africa emerging as the top African country for foreign exchange accessibility. Scoring 87 out of 100, South Africa's well-developed financial markets, deep capital reserves, and flexible exchange rate system give it an edge over its counterparts.

Access to foreign exchange is a critical component of financial market stability, influencing trade, investment, and overall economic growth. However, many African countries have struggled to secure enough foreign currency due to factors like economic instability, fluctuating global commodity prices, and policy challenges. Despite these challenges, some countries have made significant progress in ensuring easier access to foreign exchange, as revealed in the Absa Africa Financial Markets Index.

The index, now in its eighth year, tracks financial market development across the continent, measuring how accessible, open, and transparent markets are. This year's report indicates an overall improvement, with 23 countries increasing their scores, a notable rise from 15 countries last year. This marks the highest proportion of improvement over the past seven years.

One of the key drivers behind these improvements has been more favourable global financial conditions, leading to enhanced activities in securities markets, better pension fund asset values, and stronger foreign exchange reserves. Additionally, macroeconomic conditions have improved, with inflation declining across the continent, though exceptions like Angola and Nigeria remain.

Transparency in policies—especially in foreign exchange markets, monetary policy, and corporate credit ratings—has also seen significant gains. This increased transparency has contributed to the improvement in foreign exchange accessibility, making it easier for businesses and individuals to access the foreign currency they need.

Following South Africa, Madagascar comes in second with a score of 79, followed by Mauritius, which secures the third spot at 76. The top 10 African countries with easy access to foreign currency are: South Africa (87), Madagascar (79), Mauritius (76), Kenya (70), Botswana (68), Egypt (67), Uganda (67), Morocco (65), Cabo Verde (65), and Tanzania (60).

The improvement in foreign exchange accessibility is expected to have a positive impact on trade, investment, and economic growth across the continent. As African countries continue to develop their financial markets and improve their macroeconomic conditions, they are likely to attract more foreign investment and increase their competitiveness in the global economy.

The Absa Africa Financial Markets Index provides valuable insights into the development of financial markets in Africa, highlighting areas of improvement and opportunities for growth. As the continent continues to evolve, it is essential to track progress and identify areas that require further development.