Despite a year marked by macroeconomic turbulence, trade uncertainty and geopolitical tensions, reform-driven African economies are proving resilient.
According to the Absa Africa Financial Markets Index 2025, while only 10 of 29 countries improved their scores, deeper analysis shows significant progress in foreign exchange reforms, climate finance, and product innovation.
Progress Despite Global Headwinds
The past 12 months have tested Africa’s financial systems. According to the index, two-thirds of countries saw their scores fall or remain unchanged. Yet beneath the surface, reform momentum is accelerating.
Kenny Fihla, CEO of Absa Group, says, “On a headline basis, the last year may feel like a bit of a disappointment. But the detail shows that progress continues to be made across the region, particularly in foreign exchange reforms, improved product diversity and action on climate change.”
The index, now in its ninth year, assesses market development across six pillars, including transparency, legal standards, and pension fund depth. Supported by the United Nations Economic Commission for Africa, it covers 29 economies representing 80% of Africa’s GDP and population.
Uganda Climbs to 3rd Place with FX and ESG Reforms
Uganda rose from 4th to 3rd in the index, scoring 66 points. Its FX liberalisation and integration of ESG compliance into supervisory frameworks were key drivers.
“The liberalisation of Uganda’s FX market and improved interbank liquidity are critical steps toward attracting investment and lowering transaction costs,” said Jeff Gable, Chief Economist at Absa.
Nigeria Holds 4th with FX Overhaul
Nigeria retained its 4th place ranking (65 points), thanks to sweeping FX reforms targeting fragmented windows and investor backlogs. These efforts are boosting market credibility and liquidity.
Botswana Surges to 6th, Leads in Pension Assets
Botswana climbed from 7th to 6th (63 points), now boasting the highest pension fund assets per working-age person. It also scored 85 in macroeconomic transparency.
“AFMI 2025 is more than a scorecard; it is a roadmap for building robust, transparent and inclusive financial markets to power Africa’s transformation,” said Ahmed Attout, Director of Financial Sector Development at the African Development Bank.
Climate Finance and Product Innovation Expand
Despite global backtracking on ESG goals, African markets are pushing forward. Four countries issued green bonds for the first time, bringing the total to 14. Ghana and South Africa introduced climate stress testing, while Egypt launched Africa’s first regulated voluntary carbon market.
Tanzania issued its first sovereign sukuk bond and Samia infrastructure bond, and Kenya approved its first asset-backed security. In total, 18 AFMI economies now offer ESG or Islamic financial products.
Ethiopia, Rwanda and Lesotho Show Notable Gains
Ethiopia, ranked 29th, posted the highest projected GDP growth at 7.4% annually. Rwanda jumped from 15th to 12th after signing five new tax treaties, and Lesotho rose from 27th to 25th with new enforceable financial collateral provisions.
A Resilient Continent
“Looking ahead, sustaining this momentum will require unwavering commitment to transparency, legal certainty and the expansion of domestic institutional investment,” said Claver Gatete, UN Under-Secretary-General.
With 22 countries projecting GDP growth and inflation falling in most economies, Africa’s financial markets are better positioned to weather global volatility than in previous years.
