Navigating global shocks: Africa’s capital markets show resilience, eye deep structural reforms in 2026

Orisemeke Benjamin

Amid persistent global economic shocks and geopolitical uncertainty, Africa’s capital markets demonstrated remarkable grit through 2025 and into early 2026.

According to the flagship Africa Capital Markets Report 2026 released by the Organisation for Economic Co-operation and Development (OECD), governments and corporates across major economies in the region successfully maintained access to crucial financing, bolstered by improving domestic macroeconomic conditions and proactive policy reforms.

Commenting on the broader regional landscape, the report highlights: “Buoyed by improving fundamentals, African capital markets have continued to function despite global headwinds. Institutional reforms have strengthened Africa’s capital markets in recent years. However, capital markets’ contribution to Africa’s economic development and resilience remains well below potential.”

However, the report carries a sobering underlying message: despite impressive growth figures, Africa’s capital markets still play a relatively limited role in the continent’s broader economic architecture when compared to peer emerging market economies worldwide.

The 2025 performance surge: Equity markets outpace global averages

One of the most striking findings in the OECD assessment is the stellar performance of African equity markets. In 2025, annual growth in African equity market capitalisation surged by an impressive 49%. This rate stands at more than twice the global average of 21% recorded over the same period, signaling rising investor confidence in select regional bourses.

Furthermore, macroeconomic stabilisation across several major economies including notable improvements in Nigeria, Egypt, and South Africa, helped tame domestic inflation, foster fiscal consolidation, and stabilize exchange rate regimes. Foreign-currency borrowing costs generally declined across these key markets. Investor confidence was further reflected in sovereign credit ratings: 13 out of 14 major African sovereign issuers (including Nigeria) held or improved their credit ratings between 2025 and mid-2026.

Structural bottlenecks: Small, illiquid, and concentrated

Despite high-flying equity growth, structural vulnerabilities persist. African markets remain relatively small and illiquid, characterized by highly concentrated ownership structures. Corporate debt financing did experience an uptick compared to historical averages, but the landscape remains heavily skewed toward syndicated loans, while corporate bond issuance remains critically low relative to other emerging regions.

Global financial analysts tracking the release noted that outstanding market-based corporate debt across Africa totaled $211 billion at the end of 2025, representing a mere 0.3% of the global total. Debt activity is also heavily concentrated geographically, with Egypt, Mauritius, Morocco, Mozambique, Nigeria, and South Africa accounting for roughly 80% of the continent’s outstanding corporate debt.

Within Nigeria, while the local exchange has benefited from recent macroeconomic recalibrations, corporate debt issuance faces similar structural constraints, remaining dominated by bank-led syndicated loans rather than deep corporate bond markets.

As a result, capital markets remain heavily underutilized as a primary engine for long-term corporate finance. This limitation directly restricts their capacity to fuel sustainable economic growth, infrastructure expansion, and regional economic resilience.

“Africa’s corporate debt markets remain too shallow and concentrated to meet its long-term financing needs,” market experts warned following the launch of the OECD study.

The path forward: Broadening assets and institutional investors

To overcome these systemic bottlenecks, the OECD report outlines clear policy priorities for African governments and financial regulators. A primary constraint remains the limited supply of investable assets. High listing costs and stringent regulatory requirements continue to discourage private firms from entering public equity markets. Moreover, a significant share of state-owned enterprise (SOE) assets across the continent remains unlisted, presenting governments with a golden opportunity to leverage state ownership to deepen public markets.

Another critical hurdle is the narrow profile of the institutional investor base. Pension and insurance assets remain heavily concentrated in just a handful of countries. For instance, looking at asset allocations in major markets like Nigeria, institutional portfolios are frequently dominated by short-term government securities and bills rather than diversified long-term equity or corporate instruments.

“Governments are actively pursuing policies to expand the supply of assets, but more can be done by leveraging a wider range of policy levers. Developing and diversifying the investor base is critical for deeper and more resilient markets, and holds many additional benefits,” OECD emphasizes:

Expanding pension coverage, nurturing institutional participation, and harnessing digital finance can dramatically expand retail investor inclusion. Ultimately, as African economies confront declining concessional financing and growing refinancing pressures from short-term debt instruments, deepening domestic capital markets particularly in vibrant economic powerhouses like Nigeria is no longer optional. It is the definitive key to securing independent, durable, and growth-oriented financing for the continent’s future.