OECD: Nigeria, Five Others Account for 80% of Africa’s Corporate Debt

Nigeria accounted for 16 per cent of Africa’s outstanding corporate debt at the end of 2025, placing it second behind South Africa among six countries that collectively held 80 per cent of the continent’s total, according to the Organisation for Economic Co-operation and Development. The OECD Africa Capital Markets Report 2026 released on Friday, reported that South Africa held the largest share at about 31 per cent, followed by Nigeria and Egypt, at 16 per cent and 13 per cent, respectively. Mauritius accounted for nine per cent, Mozambique six per cent and Morocco five per cent, underscoring the concentration of corporate borrowing in a handful of African economies. The report showed that South Africa had retained its position as the continent’s largest corporate debt market over the past 15 years, with outstanding debt of $63 billion at the end of 2025. Egypt’s share, however, declined considerably over the period. Companies headquartered in the country accounted for 30 per cent of Africa’s corporate debt in 2010, slightly below South Africa’s share. By 2025, that proportion had fallen by more than half. The OECD attributed the decline largely to a contraction in Egypt’s corporate debt stock, rather than substantial growth in other African markets. Across most of the continent, syndicated loans remained the dominant source of market-based corporate debt financing. Corporate bonds played a more prominent role in Morocco, Gabon, Sudan and Togo. Outside Morocco, however, the organisation said the greater contribution of bonds largely reflected issuance by financial institutions and the limited development of syndicated loan markets. The OECD noted that African economies had demonstrated some resilience despite difficult external and macro-financial conditions. Market reforms, increased participation by domestic investors and improvements in financial infrastructure had provided support. Nevertheless, the continent accounted for just 0.4 per cent of global market capitalisation in 2024. Limited liquidity, shallow domestic markets and continued reliance on bank lending and external official financing remained significant obstacles to capital market development. Despite these weaknesses, the report identified substantial resources within Africa that could help meet its long-term financing needs. It estimated the continent’s domestic capital pools at more than $4.4 trillion, comprising assets held by banks, public development banks, sovereign wealth funds, pension funds, insurers, other financial institutions and central banks. Mobilising a greater proportion of these resources through domestic and regional capital markets could support productive investment and strengthen financial resilience, particularly as access to external funding remained constrained. Africa’s domestic capital pools represented approximately 0.9 per cent of global financial assets, the report stated. The OECD said capital markets remained underused as a source of long-term finance compared with other emerging economies, limiting their contribution to growth and economic resilience. In Nigeria, corporate borrowing patterns reflected the continued dominance of bank financing, despite increased use of commercial papers and corporate bonds. According to Nairametrics, a review of 19 of the largest companies in the NGX 30 showed combined debt of N6.25 trillion as of June 2026. Bank loans and other direct borrowing facilities accounted for N4.64 trillion, or 74.2 per cent of the total. Businesses have, however, increasingly turned to commercial papers to meet their funding requirements. Nairametrics Research reported that Nigerian companies raised about N1.61 trillion through commercial papers in 2025, up 40 per cent from the N1.15 trillion recorded in 2024. By May 2026, about 24 companies had issued commercial papers. FMDQ data also showed that outstanding corporate bonds reached approximately N2.30 trillion in June 2026, while outstanding commercial papers stood at N465.34 billion. These developments came amid shifts in banking system liquidity. Nairametrics reported that the Central Bank of Nigeria recorded a net liquidity injection of approximately N3.20 trillion in October 2026. Maturing securities worth N10.69 trillion exceeded the N7.49 trillion raised through Open Market Operations and Nigerian Treasury Bill auctions during the month.