East African equity markets showed the best performance in Sub-Sahara Africa (SSA) during 2014, led by Tanzania (+22.7%), Uganda (14.1%) and Kenya (13.3%), according to a report by PineBridge Investments.

Overall, SSA equity market performance was mixed.

While most markets were up in Southern Africa, with the exception of Zimbabwe which declined 19.5% in USD terms, in West Africa, Nigeria (-27.9%) and Ghana (-19.5%) performed poorly in 2014.

“The Nigerian market dropped by 27.9% on fears of currency devaluation amid falling oil prices. Ghana suffered macro-economic imbalances for most of 2014,” said PineBridge Investments.

The poor returns in most countries in SSA had to do with the weakening of African currencies against the US dollar.

According to the IMF World Economic Outlook, SSA economies are expected to grow by 4.9% in 2015.

The asset manager said the markets would be positively impacted by higher growth rates in terms of the gross domestic product.

“We expect equity markets in the region to be broadly supported. Strong growth, pro-business policies and benign macro-environment – supported by lower oil prices – should have positive impact on both consumer and business spending,” said PineBridge Investments.

The report added higher economic growth would result in higher corporate earnings that would in turn positively impact stock prices.

Nevertheless, the report pointed to numerous risks that could affect the outlook in SSA.

“Global growth remains a concern, especially due to Africa’s growing trade ties with the rest of the world. Softer commodity prices may adversely affect revenues of resource rich exporting countries. Fiscal vulnerabilities have also increased in recent years,” said PineBridge.

“However, policy makers are increasingly sophisticated and we believe they will proactively cushion their economies from externalities.”