African markets index rises to 56 on reforms

Absa and OMFIF said 21 of the 29 countries covered improved their scores, with the average reaching the highest level since the index began 10 years ago. The report said inflation fell in 20 markets and the ratio of external debt to GDP also improved in 20, easing some of the macro pressure that has constrained borrowing and portfolio flows in recent years.

South Africa remained the top-ranked market, followed by Mauritius and Namibia. Cape Verde posted the sharpest rise, climbing six places to 13th, while Ghana moved up four places to sixth. Nigeria and Botswana each slipped two places, underscoring that progress remains uneven even as the broad direction improves.

For investors, the message is less about a sudden rerating than a gradual improvement in market usability. The index evaluates depth, access to foreign currency, transparency, pension development and legal and regulatory frameworks — the plumbing that determines whether savings can be recycled into corporate financing and infrastructure. Better scores on those measures can lower transaction frictions, broaden the buyer base for local debt and equity, and improve sovereign funding options.

The report also shows that reforms are starting to matter more than simple macro stabilization. The 2026 edition uses fixed benchmarks of good practice rather than a direct country-to-country comparison, and historical scores were recalculated to keep the 10-year view consistent. That makes the new high more of a structural signal than a short-term statistical quirk.

Still, the constraints are clear. Weak trading activity remains the biggest obstacle flagged by the study, limiting liquidity even where product range and infrastructure have improved. That means stronger scores do not automatically translate into easier fundraising for companies or a bigger channel for domestic savings into roads, power grids and other long-term assets.

There are also signs that the market architecture is broadening beyond conventional banking and sovereign finance. Nineteen countries reported environmental, social and governance initiatives, while 11 have introduced climate stress tests, suggesting that sustainable finance is becoming embedded in more jurisdictions. That could matter for investors seeking longer-duration opportunities and for issuers trying to tap a wider pool of global capital.

The bullish case is that falling inflation, stronger reserves and regulatory reform are laying the groundwork for a deeper regional market cycle. The bear case is that without more trade, liquidity and cross-border capital flows, the gains may remain concentrated in a handful of better-run markets while the broader continent continues to lag.