African firms have raised simply $220 billion in fairness over the previous 25 years, accounting for just one% of worldwide fairness issuance and about 0.5% of the continent’s mixed GDP, in accordance with new knowledge.
The figures are contained within the Africa Capital Markets Report 2025 revealed by the Organisation for {Economic} Co-operation and Improvement (OECD).
The worldwide physique selling insurance policies to enhance {economic} development, {financial} stability, and residing requirements throughout nations, highlighted the persistent underdevelopment of Africa’s capital markets regardless of 20 years of reforms.
The report warned that weak and shallow markets are constraining development, worsening debt pressures, and undermining the continent’s local weather ambitions.
The OECD made up of 38 nations, is saying that Africa’s economic system has outgrown its {financial} markets, leaving firms and governments with out the depth of funding wanted to help long-term growth.
The organisation, which acts as a coverage assume tank and standard-setting discussion board, argues that capital markets on the continent are too small, too shallow, and too concentrated to play their anticipated function.
The OECD concludes that with out deeper and extra inclusive markets, Africa will battle to finance development, handle rising debt sustainably, and meet its local weather commitments.
Whereas Africa accounts for about 3% of worldwide GDP, its presence in international capital markets stays disproportionately small.
The OECD estimates that the continent represents barely 1% of worldwide fairness market capitalisation and the same share of worldwide company and sovereign bond markets.
This mismatch, the report notes, helps clarify why many African firms battle to scale and why investment-led development stays elusive.
Over the previous 20 years, African governments and regulators have pursued reforms aimed toward deepening fairness and debt markets, together with new exchanges, itemizing guidelines, and market infrastructure upgrades. Regardless of these efforts, progress has been uneven and restricted in scale.
Capital elevating stays closely concentrated in a handful of nations.
Most different exchanges stay illiquid and dominated by a number of giant companies.
In consequence, many African economies stay successfully shut out of market-based financing, notably small and medium-sized enterprises.
The OECD hyperlinks weak capital markets on to Africa’s debt and financing challenges, noting that shallow native markets push governments and companies towards pricey overseas borrowing. This publicity heightens vulnerability to exterior shocks.
The report additionally warns that underdeveloped capital markets have gotten a serious bottleneck to Africa’s local weather and vitality transition objectives.
The OECD’s warning carries important implications for companies, governments, and buyers throughout the continent. Weak capital markets have an effect on almost each facet of {economic} growth.
Local weather and infrastructure ambitions face a financing hole, as banks can not fund 20–30-year initiatives at scale, and capital markets are underutilized.
The OECD’s stark warning is that if Africa’s capital markets stay this small and concentrated, development will keep fragile, debt will stay costly, and growth objectives will proceed to go unfunded, turning the financing hole right into a binding constraint on the continent’s {economic} future.
