JOHANNESBURG,- Africa’s corporate debt markets are far too small to match the continent’s economic weight and growing financing needs, the Organisation for Economic Co-operation and Development said on Friday, with outstanding market-based debt totalling only $211 billion at the end of 2025.
The shortfall could impinge both economic growth and leaders’ aims to expand local financing in order to protect companies and countries on the continent during periods of global market stress, when foreign lenders often pull back from markets perceived as risky, the OECD warned.
“Overall, capital markets remain underutilised 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 in its Africa Capital Markets Report 2026.
The report’s estimates are based 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, is 44% smaller in inflation-adjusted terms than its 2015 peak, largely due to reduced activity in South Africa.
Companies across the continent issued no more than 20 bonds in 2025, 17 of them by financial firms. Six countries — Egypt, Mauritius, Morocco, Mozambique, Nigeria and South Africa — accounted for 80% of outstanding corporate debt.
Only 17% of corporate debt issued in 2025 was in local currency, limiting borrowers’ ability to secure long-term financing without exposure to exchange-rate swings.
Economic and institutional hurdles are the main obstacles to developing bond markets in countries without them, the OECD said, adding that policymakers must take “a broad, whole-of-government approach”.
Regulatory quality, rule of law, exchange-rate stability and well-developed pension funds are among the factors most closely linked to deeper bond markets, the report said.
The more than 25% drop in aid to sub-Saharan Africa from OECD donor countries underscored the need for deeper domestic capital markets, the OECD said.
EQUITY MARKETS GROW BUT STAY CONCENTRATED
African equity market capitalisation surged 49% in 2025, more than twice the gain in broader emerging markets. Four countries — South Africa, Egypt, Nigeria and Morocco — accounted for 88% of the total.
At a round table on Friday, OECD Director for Financial and Enterprise Affairs Carmine Di Noia said Ethio Telecom’s listing on Ethiopia’s new securities exchange in May and the Kenya Pipeline Company’s recent IPO underscored the rise in investable assets beyond the traditional hubs.
He also said that three quarters of large non-financial state-owned African enterprises remain unlisted, representing a large potential pool of assets.
Source: Reuters
