On Wednesday,23rd March 2022 EFG Hermes held a Quarterly Media Roundtable to hear the latest insights on the key trends and expectations that will drive local and foreign investments in 2022.
EFG Hermes is a financial services corporation with access to emerging and frontier markets and a current footprint spanning twelve countries across four continents.
Below are some of the insights to drive local and foreign investments:
Central Bank Digital Currency (CBDC) and impact on the market
Although CBDC could make transactions faster, cheaper, and more secure, significant industry players such as Safaricom will continue to have an advantage due to their value add and robust ecosystem.
Because digital currencies are App-based, most services will be limited in Kenya due to the low penetration of mobile phones and smartphones. As a result, players like M-Pesa will continue to dominate the market.
Governments should engage Safaricom to cut costs, especially for B2B customers, rather than rushing to bring in CBDC, as per EFG.
The admission of the Democratic Republic of Congo to the East Africa Community
With DRC’s admission to the EAC, the country’s human capital rises automatically, which is appealing to investors as the country’s population grows. The EAC will gain from DRC resources (raw materials, minerals, and so on), while DRC will profit from the EAC members’ skills (investment opportunities).
If Ethiopia enters the EAC, the EAC will have the potential to attract 100 million more people, making it a more attractive destination for international direct investment.
NSE Stock Market
New blood is needed to fight for retail and local institutions to trade. The current low levels of liquidity provide opportunities for retail to enter. Investing in equities should be made more accessible to the general public. It should be considered as a form of alternative social capital that anybody may invest in.
The disclosure of listed businesses has improved as a result of corporate governance. Access to management, transparency, the availability of trustworthy data, and the application of ESG regulations have all improved. As businesses strive to be more transparent to the public and stakeholders, this is a positive step forward.