Africa’s corporate debt markets remain too small and concentrated to meet the continent’s growing investment needs, with outstanding market-based corporate debt reaching just $211 billion at the end of 2025, according to the Organisation for Economic Co-operation and Development (OECD). The findings, published in the OECD’s Africa Capital Markets Report 2026 on November 6, highlight how limited access to long-term financing could constrain business expansion, infrastructure investment and economic resilience as governments and companies seek alternatives to increasingly constrained external funding.
The report, which covers all 54 African countries, found that the continent’s corporate debt markets accounted for only 0.3% of global outstanding corporate debt in 2025, despite Africa representing 2.7% of global gross domestic product. The imbalance reflects a financing system in which companies remain heavily dependent on syndicated loans, while corporate bond markets and private credit provide relatively limited alternatives for mobilising long-term capital.
According to the OECD, syndicated loans accounted for 81% of Africa’s outstanding corporate debt at the end of 2025, leaving corporate bonds as a comparatively small component of the market. The corporate bond market stood at approximately $35 billion, 44% below its 2015 peak in inflation-adjusted terms, largely reflecting reduced activity in South Africa. Companies across the continent issued no more than 20 bonds in 2025, 17 of which came from financial firms.
The figures point to a structural limitation in how African businesses finance expansion. While syndicated loans can provide substantial funding to established companies, they are often arranged through banks and require borrowers to meet credit, collateral and financial reporting conditions that smaller businesses may struggle to satisfy. A narrow bond market also limits the range of investors and financing structures available to companies seeking longer repayment periods or capital for large investment programmes.
The consequences extend beyond corporate balance sheets. African economies require substantial investment in electricity generation, transport infrastructure, manufacturing, agricultural processing and digital systems, sectors that often depend on financing with longer maturities than conventional working capital loans. When companies cannot secure appropriate funding, projects may be delayed, investment costs can rise and businesses may be less able to expand production or employ additional workers.
The OECD estimates that Africa faces an annual financing gap exceeding $400 billion to achieve high performance across four Sustainable Development Goals covering education, energy, productivity and infrastructure. The shortfall places additional pressure on governments, development finance institutions and private investors to mobilise domestic capital and expand financing channels capable of supporting productive investment.
For energy and infrastructure businesses, the availability of long-term financing is particularly important because projects often require substantial upfront expenditure before generating stable revenues. Renewable energy facilities, transmission networks, industrial plants and transport systems may take years to recover their initial costs. A market dominated by shorter term or bank arranged borrowing can make it harder to match financing structures with the operating life of these assets.
The financing challenge is also relevant to Africa’s industrial development. Companies seeking to establish manufacturing facilities, process agricultural products or expand mineral refining operations need capital for equipment, working infrastructure and supply chain development. Where funding is expensive or difficult to access, businesses may remain concentrated in lower value activities, limiting opportunities to create jobs and retain more economic value within domestic markets.
The report identifies the concentration of corporate debt as another constraint. Six countries , Egypt, Mauritius, Morocco, Mozambique, Nigeria and South Africa accounted for 80% of outstanding corporate debt at the end of 2025. South Africa alone represented 30% of the total. This concentration suggests that access to market-based finance remains uneven, with businesses operating in countries with less developed financial infrastructure facing fewer opportunities to raise capital through public markets.
The limited participation of smaller companies further narrows the potential contribution of capital markets to employment and economic diversification. According to the OECD, median issuance sizes for corporate bonds and syndicated loans in Africa exceed those in emerging markets more broadly, indicating that market-based borrowing is primarily accessible to larger companies. Smaller businesses continue to depend largely on direct bank lending, which may not provide the scale or maturity required for substantial investment.
This matters for Africa’s sustainability transition because many of the investments needed to improve resource efficiency, expand clean energy, modernise industrial operations and strengthen climate resilience depend on companies having access to capital. Small and medium-sized enterprises often play important roles in local supply chains, construction, agricultural processing and service delivery, but their ability to adopt new technologies or expand production can be constrained by financing conditions.
The currency composition of corporate borrowing presents another risk. Only 17% of corporate debt issued in Africa in 2025 was denominated in local currency, according to the OECD. Companies borrowing in foreign currencies while earning revenues primarily in domestic currencies can face higher repayment costs when exchange rates weaken. Such mismatches can become particularly difficult during periods of financial instability, when currency depreciation and tighter credit conditions occur together.
For businesses operating in sectors with long investment cycles, foreign currency borrowing can create additional uncertainty around project costs and future cash flows. A company financing equipment imports or infrastructure in dollars may face higher domestic currency repayment obligations if its revenues are generated in local markets. The risk can affect investment decisions, pricing and the ability to maintain operations when financial conditions deteriorate.
The OECD argues that deeper local currency debt markets could help reduce these vulnerabilities by allowing companies to obtain longer-term financing in the currencies in which they generate revenue. However, the report cautions that market development depends on more than issuing additional bonds. Investors require confidence in the legal framework, corporate governance, financial disclosure and macroeconomic conditions that determine whether debt can be repaid.
Regulatory quality, the rule of law, exchange rate stability and the development of pension funds are among the factors the OECD identifies as closely associated with stronger corporate bond markets. These conditions influence both the supply of financing and the willingness of domestic institutions to invest in corporate securities. Market infrastructure improvements may therefore have limited effect if broader economic and institutional risks remain unresolved.
The development of pension funds could be particularly important for expanding the domestic investor base. Long-term institutional investors can provide a source of capital for securities with extended maturities, potentially helping companies finance infrastructure and productive assets. However, pension investment depends on regulatory safeguards, suitable investment opportunities and confidence in the quality of corporate issuers.
Africa’s private credit market has also expanded, with assets under management increasing from $2.2 billion in 2020 to $5.5 billion in 2025. Nevertheless, the OECD notes that much of the capital remains undeployed, indicating that investor interest has not consistently translated into financing for companies. This suggests that the challenge is not simply attracting funds, but creating the conditions under which businesses can access them and investors can assess risk.
The financing environment is becoming more demanding as external development assistance declines. Preliminary data cited by the OECD indicate that aid from OECD donor countries to Sub-Saharan Africa fell by more than a quarter in 2025. While domestic capital markets cannot replace concessional development finance, a broader financing system could reduce the extent to which companies depend on external funding sources that may become less available during periods of global stress.
The report also points to the potential role of equity markets in expanding the range of investable assets. African equity market capitalisation grew by 49% in 2025, more than twice the global rate, but four countries: South Africa, Egypt, Nigeria and Morocco accounted for 88% of total market value. The increase indicates renewed activity, although concentration and limited liquidity continue to restrict the reach of public markets.
New listings and the participation of state-owned enterprises could provide additional opportunities to broaden investment. The OECD notes that three-quarters of large non-financial state-owned enterprises in Africa remain unlisted, representing a potential pool of assets that could contribute to capital market development. Listing such companies, however, would require appropriate governance, disclosure and regulatory arrangements to protect investors and maintain public accountability.
For governments, the policy challenge is to strengthen corporate financing without creating additional financial instability. Expanding bond markets requires credible regulation, predictable enforcement, stable macroeconomic conditions and institutions capable of supporting investors and issuers. These measures are particularly relevant where public finances are already under pressure and governments are seeking to mobilise private investment for infrastructure and economic transformation.
The OECD recommends a coordinated, whole-of-government approach to developing corporate debt markets, rather than relying on technical reforms alone. That approach would need to address the conditions affecting investor confidence, local currency financing, pension assets and access to market-based funding for companies beyond the largest established borrowers.
For African businesses, the potential benefits of deeper debt markets would depend on whether financing becomes more accessible, affordable and suited to investment needs. For governments, stronger domestic capital markets could support private sector expansion while reducing some exposure to external financing shocks. For communities, the implications would ultimately be reflected in whether companies can invest, create employment and deliver goods and services at a scale that supports economic development.
Africa’s corporate debt market therefore remains a central part of the continent’s broader development-financing challenge. The $211 billion market identified by the OECD demonstrates that corporate borrowing exists, but its concentration, currency exposure and dependence on syndicated loans limit its contribution to long-term investment. Expanding access will require institutions and markets capable of converting domestic savings and investor capital into productive financing, while maintaining the governance and financial stability needed to sustain that investment.
