NAIROBI, Feb 5 – The Organisation for Economic Co-operation and Development has said that African companies raised about $220 billion in equity over the past 25 years, accounting for roughly 1 percent of global equity issuance and about 0.5 percent of the continent’s combined gross domestic product.
The figures were published in the Africa Capital Markets Report 2025, which reviewed the development of equity and debt markets across the continent. The OECD said the data shows that Africa’s capital markets remain underdeveloped despite more than two decades of reforms aimed at deepening market access and improving financial infrastructure.
According to the report, Africa’s economy has expanded faster than its financial markets, leaving businesses and governments without sufficient long-term funding options. As a result, capital markets across the continent remain small, shallow, and highly concentrated, limiting their ability to support growth and absorb economic shocks.
The OECD estimates that Africa accounts for about 3 percent of global GDP, yet represents barely 1 percent of global equity market capitalisation. A similar pattern holds in bond markets, where the continent’s share of global corporate and sovereign issuance remains limited.
Over the 25-year period reviewed, equity financing raised by African firms amounted to roughly 0.5 percent of the continent’s combined GDP. As a result, companies continue to rely heavily on bank lending rather than market-based financing. The report noted that high borrowing costs and limited access to long-term capital have constrained business expansion and innovation.
Capital raising activity remains concentrated in a small number of countries. South Africa, Egypt, and Nigeria accounted for more than 80 percent of total capital raised across the continent, while South Africa, Egypt, Nigeria, and Mauritius together made up around 60 percent of Africa’s corporate debt market. Most other exchanges remain illiquid and dominated by a small number of large firms.
The OECD said weak local capital markets have pushed governments and businesses toward foreign borrowing, increasing exposure to external shocks. About 80 percent of rated African countries are classified as high risk or worse due to rising debt vulnerabilities. Local currency bonds offer real yields of about 5 percent, while United States dollar denominated African bonds carry nominal yields of around 9 percent.
The report also said limited market depth has made it harder to finance infrastructure and long-term projects, including climate and energy investments.
Category: Markets
Tag: Africa Capital Markets
