The latest Global Financial Centres Index (GFCI 24) statistics were released and South Africa has a new financial capital. Cape Town topped the local list, beating long-standing financial hub Johannesburg.
Cape Town is a new entrant on the index and is ranked 38 in the world. Johannesburg has dropped five places and is now ranked as the 57th best financial centre. The GFCI 24 was released in September 2018 by Z/Yen Partners and the China Development Institute (CDI).
These indices are released twice a year - in March and September - and are highly regarded by the financial industry as a valuable reference for policy and investment decisions. The index is also a reflection of future competitiveness for all the major financial centres across the globe.
Significant changes to the latest financial centre rankings
Besides Cape Town becoming the top financial centre in South Africa, it has also become the second highest ranked city in Africa. Casablanca (Morocco) retained its top position on the index, and Cape Town is followed by Mauritius in third place. Johannesburg moved down to fourth on the continent.
Globally, New York regained top spot, beating London by just two points. Over the years, London and New York have jostled for the top spot, but both cities are being chased down by Asian centres such as Hong Kong, Singapore and Shanghai.
How the GFCI is compiled
The bi-annual indices rank the top 100 financial centres in the world. This latest edition, the 24th, was compiled using 137 different factors and quantitative metrics. These metrics are provided by third-party organisations such as the World Bank, the Economist Intelligence Unit and the United Nations.
The GFCI is also compiled from questionnaires and responses that investigate the significance of financial centres for investors. Among many questions, potential investors are asked which cities are likely to show growth and potential over the next two or three years.
Cape Town's entry onto the GFCI is a welcome development for South Africa and shows that the country has great potential to grow.
Image: Joshua Oates