Our Programmes



Sign up to our newsletter.

Follow ODI

Capital market development in sub- Saharan Africa: Progress, challenges and innovations

Working papers

Written by Judith Tyson, Sherillyn Raga

Working papers

This paper presents an overview of capital markets in Africa. These markets are composed mainly of stock exchanges and bond markets. Securities markets are nonnegligible complements to bank financing on the continent, with bond issuances mostly done by governments and only fewer big corporations listed on the domestic stock exchanges. Corporate bonds constitute a tiny part of the capital markets in most African countries. African capital markets can increase the investor base by tapping into the huge financial resources of institutional investors. Moreover, as state-owned enterprises are among the big economic players in many African countries, privatising some of these through ‘democratic’ initial public offerings and listing them on local exchanges will increase the number of listed companies and offer investors more choices to diversify their portfolio. The success of these initiatives requires the continuous improvement of the business environment, the establishment of sound and reliable regulatory frameworks, financial literacy and management structures that do not yet fully exist in many African countries. We present case studies of capital market development in Asia to draw lessons for capital market development in Africa.