Africa's corporate debt markets are struggling to provide the scale of financing needed to support business expansion, infrastructure development and long-term economic growth, the OECD said in its Africa Capital Markets Report 2026.

The report, which covers all 54 African countries, estimates that outstanding market-based corporate debt totalled $211 billion at the end of 2025. The assessment draws on bond and loan transaction records from the London Stock Exchange Group and private credit fund data from Preqin.

Africa's corporate bond market stood at approximately $35 billion, representing a 44% decline in inflation-adjusted terms from its 2015 peak. The OECD attributed much of the contraction to reduced market activity in South Africa.

Corporate bond issuance also remained limited across the continent. African companies issued no more than 20 bonds in 2025, with financial institutions accounting for 17 of them.

Market activity remains heavily concentrated in a handful of countries. Egypt, Mauritius, Morocco, Mozambique, Nigeria and South Africa collectively accounted for 80% of outstanding corporate debt, highlighting the uneven development of capital markets across the continent.

The report also identified significant currency-related constraints. Only 17% of corporate debt issued in 2025 was denominated in local currencies, leaving many businesses exposed to exchange-rate fluctuations when servicing foreign-currency obligations.

The OECD said the challenges facing countries without established corporate bond markets are primarily economic and institutional rather than technical.

It identified regulatory quality, the rule of law, exchange-rate stability and the development of pension funds as important factors associated with deeper and more effective bond markets.

The organisation urged African policymakers to adopt a broad, coordinated, whole-of-government approach to strengthening capital markets and improving access to long-term financing.

The findings come as external development financing faces increasing pressure. Preliminary data showed that aid from OECD donor countries to sub-Saharan Africa fell by more than a quarter in 2025, reinforcing the importance of mobilising domestic savings and developing alternative sources of investment capital.

The report highlights the need for African economies to strengthen their financial systems and create more resilient domestic financing channels to support private-sector growth.

Africa Business Outlook

The development of deeper corporate debt markets could become a major investment opportunity for African financial institutions, pension fund managers, investment banks and regulators.

However, progress will depend on stronger institutions, predictable regulations, currency stability and increased investor confidence.

Expanding local-currency bond issuance could also help African businesses reduce foreign-exchange risks while creating new investment opportunities for domestic institutional investors.

Source: Reuters

Reporting: Colleen Goko

Editing: Christopher Cushing