Namibia has maintained its position as Africa’s leader in pension fund development for the fifth consecutive year, according to the latest ABSA Africa Financial Markets Index (AFMI) 2024.
The country boasts the highest pension fund assets per capita on the continent, standing at N$88,425 (US$4,806).
The AFMI report indicates that 50% of Namibia’s pension fund assets were invested domestically by the end of 2023, meeting government-mandated targets.
“Namibia retains top position in the index for the fifth consecutive year, with the highest pension fund assets per capita in the index at US$4,806,” the report states.
Namibia’s pension system outstrips those of other African nations, with South Africa (66), Mauritius (64), and Seychelles (60) trailing behind.
However, in market depth, Namibia ranks 13th with a score of 38, reflecting relatively underdeveloped financial markets compared to regional leaders such as South Africa (100), Morocco (63), and Nigeria (57). The report attributes this to declining large-cap stock trading, as noted in the 2023 Namibian Stock Exchange (NSX) annual report.
Efforts to modernise Namibia’s financial market infrastructure are ongoing, with the launch of a Central Securities Depository (CSD) in March 2024. Full implementation is expected by mid-2026, aiming to enhance market liquidity and efficiency.
“The initiative is aimed at the digitalisation of securities and the settlement process, which is intended to foster greater market liquidity. The CSD is expected to fully launch mid-2026. The NSX also embarked on a project to implement a digital bond trading system on the domestic securities exchange,” the report states.
Namibia ranks 15th in access to foreign exchange with a score of 54, positioning it in the mid-tier among African economies. It trails South Africa (87), Madagascar (79), and Mauritius (76), but outperforms Nigeria (52), Mozambique (47), and Zimbabwe (33).
“Almost all countries score 100 for reporting standards in this pillar due to the daily frequency and publishing of official exchange rates on central bank websites. However, adoption of the FX Global Code – an internationally recognised set of best practice principles to ensure a transparent FX market – remains limited,” the report notes.
The country ranks 18th in market transparency, tax, and regulatory environment with a score of 59, behind Mauritius (95), South Africa (91), and Egypt (88), but ahead of Mozambique (45), Ethiopia (42), and Lesotho (37). The ranking suggests a moderately transparent financial market but highlights areas needing improvement in regulatory efficiency, tax policies, and governance.
Namibia ranks 7th in macroeconomic environment and transparency, scoring 77. It is among the top-performing African nations in macroeconomic stability, trailing Botswana (88), Uganda (87), and Tanzania (85), but ahead of Mauritius (74), Nigeria (74), and Egypt (73).
In legal standards and enforceability, Namibia ranks 9th with a score of 40, placing it in the lower-mid range. The country significantly lags behind leaders such as Mauritius (100), South Africa (100), and Ghana (90), but is on par with Mozambique (40) and Zimbabwe (40), and outperforms Angola (25) and Botswana (10).
While Namibia’s legal framework is functional, the report highlights gaps in enforcement and regulatory effectiveness, signaling areas that require improvement to enhance investor confidence and economic competitiveness.
