Africa Capital Markets Report 2026

Executive summary

African economies navigated a challenging external environment in 2025 and 2026, marked by energy price shocks, elevated global interest rates and heightened geopolitical uncertainty, and these pressures have flowed through to financing conditions. Economies in the region have absorbed these shocks relatively well, with governments and businesses generally able to secure continued access to financing through capital markets. However, the experience across countries has been uneven. The ability of capital markets to provide a stable and resilient source of financing during periods of stress depends on their depth and maturity, which remain limited in many African economies. Total financial assets across African economies, which constitute the potential domestic capital base, account for only 0.9% of global financial assets, well below the region's 2.7% share of global GDP, highlighting the limited scale of domestic financial markets.

Buoyed by improving fundamentals, African capital markets have continued to function despite global headwinds.

African capital markets showed notable resilience despite global volatility over 2025 and into 2026. Equity markets grew by 49% in 2025, well above the MSCI Emerging Markets Index. This performance was driven by external factors, such as currency appreciation against the US dollar and elevated commodity prices, as well as domestic factors including robust economic growth, rapid disinflation and institutional reforms. There was a modest increase in equity issuance in 2025, while corporate debt issuance also increased slightly, but not sufficiently to reverse a long-term decline in outstanding amounts.

Major African sovereigns generally maintained market access throughout the recent period of global uncertainty. Sovereign bond markets continued to attract demand, and Eurobond spreads tightened over the period despite multiple external shocks, reflecting improved market sentiment. Improved macroeconomic fundamentals, including institutional reforms, stronger economic growth, currency appreciation and disinflation, have flowed through to lower credit default swap spreads, and improved or steady credit ratings for 13 out of 14 major sovereign issuers.

Institutional reforms have strengthened Africa’s capital markets in recent years.

Many African countries have recently introduced reforms aimed at improving market integrity, investor protection and regulatory effectiveness. Corporate governance frameworks increasingly align with international standards, while several capital market regulators have strengthened their operational independence and are reinforcing the foundations of institutional capacity through self-funding and hybrid funding models. In some jurisdictions, market infrastructure has also improved, alongside regulatory reforms to strengthen trading and post-trade infrastructure, the dematerialisation of securities, and frameworks for derivatives trading.

These developments have been further supported by governments’ continued efforts to diversify financing sources in sovereign borrowing, strengthen investor relations and introduce new debt instruments. Sovereigns’ growing domestic currency issuance can make public finances more resilient to geopolitical or macroeconomic shocks, but has corresponded with increasing refinancing risks, with the share of debt maturing within one year at its highest level since 2020. Strengthening debt management frameworks and expanding the maturity profile of domestic debt markets, including through switch operations, remain important priorities to strengthen capital markets’ foundations.

Capital markets’ contribution to Africa’s economic development and resilience remains well below potential.

While this progress represents positive momentum, Africa’s capital market activity remains highly concentrated in a small number of countries, mainly South Africa, Egypt, Nigeria and Morocco, and is overall significantly smaller and less liquid compared to emerging market peers elsewhere in the world. Corporate debt markets remain particularly underdeveloped, with only USD 211 billion in outstanding debt at end-2025, 81% of which consisted of syndicated loans. Moreover, only 17% of corporate debt issuance in 2025 was denominated in local currency. Shallow corporate debt markets, an absence of investable securities, narrow investor bases and limited local currency financing constrain the ability of market-based finance to act as a strong countercyclical source of funding during periods of stress in many jurisdictions.

Continued efforts to strengthen supervision, improve regulatory frameworks, enhance corporate governance standards and support financial literacy can help expand access to market-based finance and attract long-term domestic and international investors. Capital market development also relies heavily on macroeconomic stability and the quality of public governance. Evidence from African corporate debt markets highlights the importance of regulatory quality, rule of law, exchange-rate stability, as well as reliance on the development of other sectors such as asset-backed pensions. Technical regulatory reforms and market infrastructure improvements are often thus not sufficient on their own, and are most likely to succeed as part of wider efforts to improve macroeconomic and institutional settings.

Governments are actively pursuing policies to expand the supply of assets, but more can be done by leveraging a wider range of policy levers.

Governments across the continent have pursued a range of measures to support an expansion in the quantity of investable assets. African sovereign issuers, for example, have introduced new bond types, including an expanded range of durations, local currency bonds listed on a foreign market, and dedicated infrastructure and development finance bonds and retail investor bonds. Such moves can help establish benchmarks for bonds and attract new investors into domestic markets.

Although 2025 saw a modest increase in equity issuance, 85% of this came from secondary offerings with initial public offering (IPO) activity also emerging outside the traditionally dominant markets. At the same time, African companies face significant financial, regulatory and market-related barriers to accessing public equity markets, such as listing costs and complex IPO requirements. Capitalising on recent momentum in public equity markets will require addressing these with proportional and flexible frameworks while maintaining appropriate standards of investor protection and market integrity.

State ownership presents a particular opportunity. Large state-owned enterprises (SOEs) remain underrepresented in public capital markets, with large listed non-financial SOEs accounting for just 27% of non-financial SOE assets in Africa, compared with 45% across emerging markets. These companies often possess the scale required for market participation, and well-governed SOEs could become an important source of new listings and debt issuance, helping increase market size, liquidity and sectoral diversification. Mobilising capital through public markets can also support financing for critical infrastructure and investment in other strategic economic priorities.

Governments are also taking steps to develop investable projects to support climate adaptation and mitigation. Fewer than 10% of African infrastructure projects reach financial close, with the vast majority failing at the feasibility or business-planning stage. Some African countries are pursuing stronger project preparation, standardisation and aggregation to expand the supply of investable projects, while well-designed guarantees, co-investment and other risk-sharing instruments can improve their risk-return profiles.

Developing and diversifying the investor base is critical for deeper and more resilient markets, and holds many additional benefits.

A broader and more diversified investor base can enhance liquidity, improve price discovery and reduce dependence on external financing. Governments and regulators in African economies have introduced reforms affecting institutional investors, eased capital account restrictions in some jurisdictions and increasingly leveraged technology to broaden retail participation. However, investor bases remain concentrated, limiting the depth and resilience of many markets. Expanding participation across institutional, foreign and retail investors will be essential to support long-term market development and to improve the effectiveness of capital markets as a source of long-term economic resilience.

Pension funds and insurance companies in particular play a central role in mobilising domestic savings and providing long-term financing to governments and businesses, but the growth of these sectors remains constrained in many African economies. Insurance penetration is low, while access to pension schemes is typically linked to formal wage employment and payroll-based contributions. Africa’s high level of informal and self-employment – around 85% of total employment, compared with 58% globally – significantly limits coverage. Where institutional investors do exist, portfolios are often heavily concentrated in government securities, reflecting both regulatory frameworks and the limited supply of investable assets. Expanding the coverage of asset-backed pension and insurance systems, improving supervision and expanding investment opportunities could help improve retirement incomes and unlock their role as drivers of capital market development.

Rising financial inclusion presents an opportunity to broaden domestic participation in capital markets. Financial literacy is increasingly recognised as an important enabler of retail investment, helping households make informed financial decisions and participate more confidently in formal financial markets. National financial literacy strategies are becoming widespread, with 17 out of 20 jurisdictions examined currently implementing or developing one. Many incorporate investment and retirement planning objectives, and further expanding financial education, particularly around investing, fraud prevention and emerging financial products, can help mobilise domestic savings and strengthen household participation in capital markets.

Digitalisation is broadening market access and supporting the development of more efficient financial markets.

Digitalisation is improving access and efficiency across both primary and secondary bond markets. Digital platforms are facilitating access to securities for a broader range of investors, with some African sovereign issuers successfully expanding retail participation through direct digital channels. At the same time, electronic trading and post-trade infrastructure are improving overall market efficiency and enabling faster settlement cycles.

The region’s embrace of digitalisation can also be seen in crypto-asset and stablecoin markets, where usage is growing rapidly, particularly in sub-Saharan Africa. While much of the current activity is associated with trading and investment within decentralised finance markets, stablecoins have the potential to facilitate more efficient cross-border payments and remittances, alongside other emerging use-cases. These developments underscore the importance of sound regulatory frameworks, financial literacy, consumer protection and cybersecurity to help ensure that financial innovation contributes to well-functioning, resilient and inclusive financial markets.