LAGOS, Nov 7 – Africa’s corporate debt markets remain too small to meet the continent’s growing financing requirements, with outstanding market-based debt totaling just $211 billion at the end of 2025, according to the Organization for Economic Co-operation and Development (OECD).
In its Africa Capital Markets Report 2026, released on Friday, the OECD warned that limited access to domestic capital markets could constrain economic growth and weaken the ability of African companies and governments to withstand periods of global financial stress, when international lenders often reduce exposure to markets perceived as risky.
“Overall, capital markets remain underutilized as a source of long‑term finance particularly when compared to other emerging-market economies limiting their contribution to economic growth and resilience,” the OECD said.
The report draws on bond and loan transaction records from the London Stock Exchange Group and private credit fund data from Preqin, covering all 54 African countries.
The corporate bond market, estimated at $35 billion, was 44% smaller in inflation-adjusted terms than its 2015 peak, largely reflecting reduced market activity in South Africa.
Corporate bond issuance also remains limited across the continent. African companies issued no more than 20 bonds in 2025, of which 17 were issued by financial institutions. Six countries, Egypt, Mauritius, Morocco, Mozambique, Nigeria and South Africa, accounted for 80% of outstanding corporate debt.
The concentration of activity in a small number of markets highlights the uneven development of Africa’s financial infrastructure and the limited availability of long-term financing instruments across much of the continent.
Currency composition presents another constraint. Only 17% of corporate debt issued in 2025 was denominated in local currencies, leaving many borrowers exposed to exchange-rate fluctuations when servicing foreign-currency obligations.
The OECD identified economic and institutional weaknesses as major barriers to developing bond markets in countries where they remain limited or absent. It called for policymakers to adopt “a broad, whole-of-government approach” to addressing the constraints.
Regulatory quality, the rule of law, exchange-rate stability and the development of domestic pension funds were among the factors most closely associated with deeper bond markets.
The need to strengthen domestic financing capacity has also become more pressing amid a reduction in external development assistance. The OECD highlighted a decline of more than 25% in aid to sub-Saharan Africa from OECD donor countries, reinforcing the importance of mobilising domestic savings and expanding local capital markets.
Equity Markets Expand, but Remain Concentrated
While corporate debt markets remain relatively shallow, African equity markets recorded stronger growth in 2025. Market capitalisation increased by 49%, more than twice the gain across broader emerging markets.
However, equity market activity remains concentrated. South Africa, Egypt, Nigeria and Morocco accounted for 88% of total African equity market capitalisation.
Speaking at a round table on Friday, OECD Director for Financial and Enterprise Affairs Carmine Di Noia pointed to recent listings as evidence that investable assets are emerging beyond the continent’s traditional financial centres.
He cited Ethio Telecom’s listing on Ethiopia’s new securities exchange in May and the recent initial public offering of Kenya Pipeline Company as examples of efforts to broaden access to equity financing.
Di Noia also noted that three-quarters of large non-financial state-owned enterprises in Africa remain unlisted, representing a substantial potential pool of assets that could expand the continent’s equity markets.
The OECD’s findings highlight a financing challenge that extends beyond the availability of international capital. Developing deeper domestic debt and equity markets could help African businesses access longer-term funding, diversify their sources of finance and reduce their exposure to external market volatility.
Expanding local-currency bond issuance, strengthening institutional investors and improving regulatory frameworks will be central to broadening participation across the continent’s capital markets.
