Africa’s corporate debt markets are 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 last year.
The shortfall could impinge economic growth and leaders’ aims to expand local financing to protect companies and countries on the continent during periods of global market stress, when foreign lenders often pulled 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,” it 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 $35bn, 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 last year, 17 of them by financial firms. Egypt, Mauritius, Morocco, Mozambique, Nigeria and South Africa accounted for 80% of outstanding corporate debt. Only 17% of corporate debt issued was in local currency, limiting borrowers’ ability to secure long-term financing without exposure to exchange-rate swings.
Economic and institutional hurdles were the main obstacles to developing bond markets in countries without them, the OECD said. Regulatory quality, rule of law, exchange-rate stability and well-developed pension funds were among the factors most closely linked to deeper bond markets.
The more than 25% drop in aid to sub-Saharan Africa from OECD donor countries underscored the need for deeper domestic capital markets.
African equity market capitalisation surged 49% last year, more than twice the gain in broader emerging markets. South Africa, Egypt, Nigeria and Morocco accounted for 88% of the total. – Reuters
- Africa’s corporate debt markets totaled $211 billion at the end of 2023, which is too small relative to the continent’s economic size and financing needs, according to the OECD.
- The corporate bond market is valued at $35 billion, 44% smaller than its 2015 peak, mainly due to decreased activity in South Africa.
- In 2023, African companies issued no more than 20 corporate bonds, with 17 issued by financial firms.
- Only 17% of corporate debt was issued in local currency, limiting long-term financing options without exchange-rate risk.
- Economic and institutional factors such as regulatory quality, rule of law, exchange-rate stability, and pension funds are key to developing deeper bond markets in Africa.
