Africa’s corporate debt market is just 0.3% of the world’s, with Egypt’s share more than halved since 2010

Africa’s corporate debt market is too thin for the economy it serves, according to the OECD’s Africa Capital Markets Report 2026. Outstanding market-based corporate debt across all 54 countries came to USD 211 bn at the end of 2025. That’s just 0.3% of the global total for a continent that accounts for 2.7% of world GDP. Syndicated loans make up 81% of that stock, and bonds only USD 35 bn.

Egypt’s slice of that market has more than halved since 2010. That year, Egyptian-headquartered companies held 30% of Africa’s corporate debt, only slightly below South Africa’s share. By 2025, Egypt’s share had fallen by more than half. The OECD attributes the drop largely to a contraction in Egypt’s own corporate debt stock, rather than to strong growth elsewhere on the continent. South Africa has been the region’s largest market for the past 15 years and now holds 30% of the total at USD 63 bn. Six countries — Egypt, Mauritius, Morocco, Mozambique, Nigeria, and South Africa — account for 80%.

Issuance is just as thin. No more than 20 corporate bonds were sold across the continent in 2025, and 17 of them were issued by financial companies. The bond market has shrunk 44% in real terms since its 2015 peak, mostly because of lower activity in South Africa. Syndicated loans signed in 2025 averaged about five years in maturity, against 7.5 years in other emerging markets. Median issue sizes for both bonds and loans still exceed those in emerging markets more broadly, which the OECD reads as a sign that large companies are the main users of the market and smaller firms still depend on bank lending.

Currency risk makes things harder. Only 17% of corporate debt issued in 2025 was in local currency, so a company that borrows in USD or EUR also takes on the risk of its own currency weakening. Egypt’s local-currency debt has a separate problem: FX rationing and sharp devaluations have repeatedly disrupted foreign investors’ ability to convert back into the greenback. As a result, they typically cap their EGP allocations at a fraction of what they put into African peers with the same nominal yield.

IN CONTEXT- Egypt’s own corporate bond market is young and short-dated. Valu closed its maiden conventional corporate bond in August, raising EGP 1 bn across two tranches: a 13-month fixed tranche at 20.75% and a 36-month tranche priced at 1% above the Central Bank of Egypt’s average corridor rate. The regulator is still writing the rulebook. The Financial Regulatory Authority’s (FRA) tighter private-bond rules, issued in August, set a firm 30-working-day subscription deadline that issuers can extend only with FRA approval.

The equity side of the same report reads better. African market capitalization rose 49% in 2025, nearly two-and-a-half times the 20% pace across emerging markets, and African exchanges beat the MSCI Emerging Markets Index over 2021-2026. Over the longer stretch since 2015, the corporate bond market has kept shrinking.

The OECD’s fixes put most of the work on policymakers. The report finds that the main barriers to bond market development are macroeconomic and institutional and that technical fixes such as better market infrastructure only pay off once those foundations are in place. Regulatory quality, rule of law, exchange-rate stability, and pension fund development are among the strongest correlates of market depth. A credible sovereign benchmark yield curve is the next building block, because it gives corporate bonds a local-currency reference to price against.

Excessive public borrowing can crowd out corporate credit, the report warns. Egypt’s borrowing is both heavy and short-dated. The state raised about EGP 4.3 tn at home in the first four months of FY 2026/27, almost all of it to refinance existing debt, and bills made up 85% of accepted domestic issuance last quarter.

Why it matters: Aid is shrinking. Official development assistance from OECD donors to sub-Saharan Africa fell by more than a quarter in a single year, yet the savings that could replace it are already on the continent. Pension and ins. assets exceed USD 1 tn, although the OECD finds that too little of that money goes into productive domestic investment. Corporate bond markets are how that money could reach African companies, Egypt’s included. By our read, what stands in the way is currency risk, along with a domestic investor base that is already busy financing the state.

MARKETS THIS MORNING-

Asian markets opened in the green earlier today. Japan’s Nikkei was up 2.4% and South Korea’s Kospi was up around 0.6% on the back of Friday’s US rally, though broader gains were limited amid concerns over a probe into Nvidia’s CEO. The MSCI Asia Pacific Index climbed 0.7%.

THE CLOSING BELL-

The EGX30 fell 0.7% at yesterday’s close on turnover of EGP 8.3 bn (24.9% below the 90-day average). International investors were the sole net sellers. The index is up 21.5% YTD.

In the green: Edita (+3.7%), GB Corp (+1.9%), and Cleopatra Hospital Company (+1.6%).

In the red: Mopco (-5.9%), Abu Qir Fertilizers (-5.8%), and Alexandria Containers and Goods (-2.5%).