PARIS, 23 Jan. - (ANA) - African capital markets are diverse in structure and maturity, but generally less developed than other emerging and developing markets, according to Oliver GARRETT-JONES of OECD. 

 

There is wide scope for a stronger role for market-based financing in mobilising domestic and international capital towards economic development, and governments and regulators in the region have a range of policy levers to drive development of these markets.

 

 

 

 

Over the past 25 years African equity market capitalisation has increased by 27 times, to around USD 560 billion in 2024, while companies raised over USD 2 trillion through debt instruments. However, despite some notable progress the region is under-represented in global capital markets relative to its share of GDP across nearly all indicators. 

 

 

 

 

Capital market activity in Africa has seen peaks and troughs since 2000 but has fallen notably in recent years. Both equity and debt issuance reached their highest point in 2007, with smaller subsequent peaks in the years around 2015, but activity has tapered off since. This activity is also highly concentrated, with South Africa, Nigeria, and Egypt accounting for 80% of equity capital raised in this period, and these same three countries along with Mauritius make up over 60% of outstanding corporate debt.

 

 

 

 

Across 16 African economies making up the vast majority of capital market activity on the continent, 13 have current or recent formal capital market strategies in place to identify barriers hindering capital market growth and develop policy responses. The specific objectives and policies vary between countries, but indicate a strong interest in developing local capital markets – and a growing focus on reforms to get there. 

 

 

 

 

Many African countries have established governance frameworks, and corporate governance codes providing principles and recommendations that go beyond minimum legal standards. These codes tend to be of a high quality, however many have not been updated within the past five years. With the establishment and revision of key regional and international standards, such as the African Principles of Corporate Governance and the G20/OECD Principles of Corporate Governance in recent years, these codes risk becoming outdated compared to other jurisdictions.

 

 

 

 

State-owned enterprises (SOEs) play an important role in most African economies, with 44 of the 100 largest African companies by turnover being state-owned or controlled. However, SOEs make up a much lower share of equity market capitalisation in Africa than other emerging markets, for example in Asia where strategic listings of SOEs have successfully grown and deepened capital markets. Governments can also leverage ownership to implement strong corporate governance in SOEs to reinforce efforts to improve wider corporate governance practices across the market. 

 

 

 

 

The outstanding marketable debt stock across Africa rose from USD 160 billion in 2007 to USD 730 billion in 2024, and around 60% of countries have sovereign bonds outstanding. Sovereign debt management is intrinsically connected to the government securities markets, which in turn influences the wider financial market. Practices like the development of liquid benchmarks along the yield curve, targeting particular market segments for example through issuance of inflation-linked or sustainable bonds, or seeking to broaden the investor base through retail programmes can aid price discovery, enhance liquidity and attract investment across the market.

 

 

 

 

Institutional investors like life insurance companies and pension funds are typically a key source of long-term capital for local markets. However in most African economies these types of investors play a minimal role, either with low levels of assets, and/or heavy investment in government bonds which limit their impact on capital market development. Promoting expanded insurance coverage and pension participation, along with frameworks that promote productivity-boosting investment, could help lift the role of these investors in countries’ economic development.

 

 

 

 

Africa has attracted investment into financial technology above its share of global GDP since 2020, reflecting a vibrant ecosystem of financial innovation, including e-money, digital payments and crowdfunding. However, as global spending on artificial intelligence accelerates, Africa’s share remains modest. Financial regulators have a role to play in encouraging responsible adoption of AI in capital markets, including by strengthening regulatory and policy frameworks applicable to AI to encourage and facilitate innovation, protect financial consumers, and align with approaches at the regional and international level.

 

 

 

 

Clean energy investment in Sub-Saharan Africa attracted USD 33 billion in 2024, with a further USD 14 billion in North Africa. If the countries in these regions are to meet their own climate goals, investment needs to rise above current levels by 1.8 times and 2.4 times respectively. Most countries do not have the fiscal space for such a level of investment, implying a strong role for private capital. To this end, there is a scope for a much greater use of the global sustainable bond market, where the African energy sector is all but absent. 

 

 

 

 

Higher levels of regional integration of national capital markets will help take forward many of the policy objectives outlined above. Such initiatives support cross-border listings, expand the pool of investors and the instruments available to them, lower operational costs, and help to realise scale, deepen markets and boost liquidity. Several regional exchanges exist, and the African Exchange Linkage Project, which is currently expanding to connect ten major exchanges covering 90% of the continent's total market capitalisation, is particularly promising. Success will require a sharp focus on implementation, including with interoperable infrastructure and compatible legal frameworks between jurisdictions.

 

Africa’s capital markets have lost ground in recent years, but many countries have frameworks and market infrastructure in place and some historical activity – and growing readiness to develop these further. Developing local capital markets will require continuous reforms that help companies and investors unlock the region’s full potential for economic development. To find out more, read the OECD Africa Capital Markets Report 2025.   - (ANA) -

 

To download the full report, visit: https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/11/africa-capital-markets-report-2025_a973e07d/7d26e1d3-en.pdf

 

AB/ANA/23 January 2026 - - -