Last week Barclays bank launched its maiden Barclays Africa Group Financial Markets Index which had Ghana ranking in the index that ranked the maturity, openness and accessibility of 17 markets in Africa based on both qualitative and quantitative criteria.
Ghana ranked below South Africa, Mauritius, Botswana, Kenya, Namibia and Kenya in the survey conducted by the bank in collaboration with Official Monetary and Financial Institutions Forum (OMFIF) – an independent think-tank for central banking, economic policy and public investment.
The index focused on fundamental pillars of financial market performance in the areas of market depth, access to foreign exchange, capacity of local investors, market transparency and regulations among others.
One worrying finding of the survey is Ghana’s poor performance as far as the capacity of its local investors is concerned. On a scale of 1-100, Ghana scored 12 – a performance that was only better than Ethiopia’s, which scored 10.
The survey cited a high non-performing loans (NPL) ratio, weak insolvency framework, and low domestic investor capacity as areas that need to improve if the country is to boost the performance of local investors
According to the survey, the relatively small size of local financial markets and illiquidity of their assets has created difficulties for the growth and development of local investors.
“Even though local investor assets have increased over the past decade, local financial markets have often not kept the pace,” the survey stated.
As Ghana looks to become a financial hub in the sub-region, the Barclays survey offers an insight into what the country needs to do to catch up with its peers as well as take the lead. Everywhere in the world, the role of financial sector players is very much crucial to how business opportunities are taken advantage of.
What Barclays has done is very commendable, and gives government and financial institutions a cut-out job to see the areas where they are lagging and catch up accordingly.
It must also be said that despite scoring 12 out of a possible 100, the survey showed that the country has made progress in growing its pension assets, possesses a strong export market share growth, has enforceable collateral positions, and netting and set-off provisions.
Just as the Managing Director of Barclays Bank Ghana, Mrs. Patience Akyianu said, this survey will no doubt help the bank play its part in promoting and supporting development of the continent’s financial markets – a clear example of its shared growth promise and commitment to creating shared value for its stakeholders.
What’s left now is for government and relevant financial institutions to take advantage of this survey and work toward the country improving its performance, thus leading to increased investments into the country.