Expanding and deepening financial markets across Africa is a central condition for the next stage of the continent's development.
That is a key conclusion of the Africa Financial Markets Index launched Wednesday by think tank Official Monetary and Financial Institute Forum (OMFIF) and sponsored by Barclays Africa Group Limited (BAGL).
Africa's large and dynamic markets present above-average opportunities for growth, yet investment prospects - for both international and local investors - are hampered by underdeveloped financial markets and unclear legal and regulatory frameworks.
The Index ranks the maturity, openness and accessibility of 17 financial markets in Africa, based on both qualitative and quantitative criteria.
Development of local investor capacity and ability to attract foreign capital are key points of focus.
Dr Akinwumi Adesina, President of the African Development Bank (AfDB), said: "Through expert analysis of the African financial markets, the Africa Financial Markets Index draws global attention to the considerable investment opportunities and uncovers the untapped market potential."
The Index focuses on six fundamental pillars for financial market performance: Market depth, Access to foreign exchange, Market transparency and regulation, Capacity of local investors, Macroeconomic opportunity and Enforceability of international financial agreements.
The 17 markets surveyed are, Botswana, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Tanzania, Uganda and Zambia.
The Index intends to track progress annually, supplying a toolkit for countries wishing to build financial infrastructure.
African countries are implementing a growing number of national policy frameworks for market development.
One of the greatest constraints on growth-enhancing investment is the low capacity of local investors, partly linked to limitations on the range of assets for local investors.
Given its size and historical position, South Africa tops the 2017 list, despite poor recent macroeconomic performance, based on the strength of its financial markets as well as its relative openness and transparency for transactions. Others are closing the gap.
Mauritius and Botswana have strengths in tax and regulation and access to foreign exchange.
Kenya and Ghana provide signs of progress as Ghana ranks seventh. Ivory Coast, with a low overall score, is home to a growing regional bourse, pointing to future improvement.
Ethiopia shows the highest GDP growth prospects of the 17 countries - even though it comes bottom of the list in terms of financial market prowess.
"The Index provides countries with valuable insights and tools to improve the state of their financial markets," says Maria Ramos, Chief Executive, BAGL.
"By broadening and deepening their understanding of the requirements of local and international investors, Africa's leaders can develop robust markets - a prime condition for sustainable, inclusive growth."
David Marsh, Managing Director of OMFIF, said "Liquidity, regulation, foreign exchange restrictions and policy choices are among the chief concerns for investors considering their African engagement."
"Our survey highlights the areas where specific countries need to make genuine advances to forge strong positions in the competition for sustainable investment."
In addition to statistical analysis, OMFIF gained additional insights by surveying 60 top executives from financial institutions operating across the 17 countries, including banks, investors, securities exchanges, regulators, audit and accounting firms, and international financial and development institutions.