Kenya tops in green financing in Africa - report

UK Secretary of State for International development Alok Sharma (C) at the listing of Kenya's first green bond by real estate firm Acom Housing at the Nairobi bourse. January 2020. [Courtesy]

Kenya and Morocco have been ranked among the top African countries whose capital markets offer investors sustainable investment products.

This is according to the latest edition of the Absa Africa Financial Markets Index that cites Kenya’s recent rollout of green bonds, sustainable equities and mutual funds as some of the indicators of the country’s progress in achieving green financing.

“Additionally, Kenya has issued ethical securities to fund socially responsible investment opportunities,” says the report.

The report has been developed in partnership with the official Monetary and Financial Institutions Forum, an independent think tank for central banking and policy. The report ranks African capital markets’ innovativeness across six pillars.

These are market depth, access to foreign exchange, market transparency, tax and regulatory environment, the capacity of local investors, macroeconomic opportunity and enforceability of financial contracts.

Overall, Kenya was ranked 11th on the continent, down four places from last year on account of the lower capacity of retail investors and legality and enforceability of standard financial markets master agreements.

Kenya’s Green Bonds Programme was, however, cited as an encouraging development in spearheading a green bond market domestically and in the East African region.

Last year, the Central Bank of Kenya (CBK) floated a Sh60 billion infrastructure bond with an 18-year tenor at a time when a majority of African economies shied away from the debt markets.

At the same time, a report by the Kenya Institute of Management (KIM), Kenya Private Sector Alliance (KEPSA) and the Nairobi Securities Exchange (NSE) released yesterday showed the country has outperformed the global average in female representation in boardrooms.

The 2021 Board Diversity and Inclusion Survey Report explored diversity beyond gender and age to other variables such as education, professional background, nationality, ethnicity and religion.

According to the report, gender diversity in Kenyan boardrooms now stands at 36 per cent, a significant increase from 21 per cent in 2017. In comparison, the global average of women holding board positions stands at 23.3 per cent, up from 20.4 per cent in 2018.