We work to strengthen Africa’s financial markets, so they’re better able to meet developmental challenges, create economic opportunities and deliver environmental benefits.
Our financial markets programmes span the continent. We work with the private sector and governments to mobilise billions in sustainable finance and provide support for regulatory work, policy development, market infrastructure and institutional strengthening.
Functioning financial markets are crucial. They provide businesses with access to finance, drive climate change initiatives, reduce risks, and build resilience to external shocks. But in most African countries, these markets are underdeveloped. They’re not able to meet the continent’s financing needs.
There are too few investment-ready projects, and markets lack the robust regulations and low transaction costs required for capital to flow. As a consequence, $2.4 trillion of domestic private capital is locked away, and competition for capital between governments and the private sector reduces the supply and raises the cost of credit.
We’re working to change all this, to close Africa’s finance gap and boost sustainable development.
Our unique approach to building financial markets in Africa is focused on three interconnected areas:
Capital Markets Development: we work with policymakers, regulators, and market actors to drive policy and regulatory reforms, strengthen market infrastructure, and build institutional capacity in order to create an enabling environment for long-term investment, particularly in local currency.
Catalytic Transactions: we work with investors, fund managers, project developers and transaction advisors to design and deploy innovative financial instruments that mitigate risk, enhance liquidity, and support market exits. These include listed funds and funds of funds, securitisations, blended finance vehicles, carbon and nature-linked instruments, thematic and outcome-based bonds, and other secondary market solutions. Through this work, we help crowd in institutional capital and accelerate investment in climate-aligned and inclusive sectors.
Sovereign Debt Advisory: we provide advisory support to African governments on sovereign debt sustainability in order to facilitate policy reform and strengthen sovereign capacity on debt management and debt reduction solutions, such as debt swaps. In this way we help create the fiscal space for sustainable investments and contribute to macroeconomic stability.
Policy and regulations: Enabling markets through policy and regulatory reform, by revamping capital market masterplans and strategic plans, and developing guidelines and listing requirements for green bonds.
Market infrastructure: Developing effective market infrastructure by building over-the-counter exchanges, securities, and credit enhancement facilities.
Financial institutions: Strengthening the ability of financial institutions to integrate social and environmental factors into their operations and capitalise on climate financing opportunities.
Financial products: Using development capital to back innovative financial models and products with the potential to transform Africa’s sustainable growth.
Knowledge platforms & connectivity: Building the competency of regulators, intermediaries and financial institutions through knowledge sharing, to enable them to make better investment decisions.
Our financial markets programmes are achieving tangible impact across Africa:
projects
across 33 countries
bn
amount of local currency funding mobilised through 21 thematic bond transactions supported by FSD Africa
m
value of loans to SMEs that support women as a result of Africa's first listed gender bond issued by NMB Bank in Tanzania with support from FSD Africa
bn
Amount of trades facilitated by the Ethiopian Securities Exchange since its launch in 2024, supported by FSD Africa
By 2030, African nations need to invest $3 trillion to tackle their Nationally Determined Contributions (NDCs) for climate change priorities. Domestic and international public and private climate finance needs to be mobilised at scale and fast.
The Africa Green Finance Coalition is a new initiative designed to fast-track African economies’ political will and efforts to mobilise and invest large volumes of green investment. The AGFC platform will enable African governments to pool resources, share learning and create a pathway for increased domestic and international flows of green investment capital to the continent.
Aiming for a formal launch at COP27 in Egypt, the AGFC platform will enable African governments to collaborate in designing future-proof climate finance regulations, policies, incentives, institutions and investment portfolios at scale.
Africa’s pension assets represent less than 1% of global assets, with a pension coverage of only 9.6%, putting a significant percentage of the elderly at risk of old age poverty.
The Programme aims to support holistic interventions that will ultimately encourage long-term (retirement) savings and create facilitative policy, regulatory and industry environment to support appropriate deployment and investment of the pension assets into the real sector. The Programme will convene pension sector actors across Africa to resolve common challenges in SSA’ pensions sector.
The interventions will ultimately encourage long-term savings, appropriate deployment, and investment of pension assets. The initiative also aims to increase pension literacy and awareness of retirement products and investments.
A pan-Africa programme that aims to support the development of private capital markets in Africa to complement public markets.
The programme’s overarching goal is to improve the availability of long-term financing for priority social and economic sectors in Africa by mobilising private equity and debt capital. Overall, the programme seeks to increase local institutional (particularly pension fund) investor participation in private equity and debt in the continent to complement development finance institutions’ financing.
The programme aims to achieve this through:
Creating a facilitative enabling environment by working with regulators to put in place regulations and policies to enable private equity and debt investments by relevant institutional investors;
Working with market participants on demonstration transactions that provide an avenue or vehicle for such investments
Capacity and knowledge development of relevant stakeholders, research, advocacy and impact reporting.
The capacity of key institutions such as ministries of finance, central banks and capital market authorities to develop, monitor and enforce financial policies and regulations is critical to developing robust, competitive and ultimately poverty-reducing capital markets. However, many of Africa’s regulators grapple with inadequate financing and human resource capacity gaps, resulting in outdated regulatory and supervision technologies and frameworks. These challenges hinder the development of African capital markets to facilitate efficient allocation of long-term capital. To address these challenges, ARSP extends technical assistance to regional securities regulators on: capacity assessment and strengthening, development of capital market development masterplans and strategic plans, regulatory frameworks for collective investment schemes, Islamic capital market products, and knowledge management products on listings and sustainability-related disclosures.
Establish a twinning arrangement between the UK and Kenyan/East African/African academic institutions to provide climate finance training to develop the capacity of local and regional policymakers, academia, regulators and financial market participants.
Ethiopia Central Securities Depository (CSD) System
In Portfolio since 0
2025 years
Value
£
Location
Ethiopia
+
Ethiopia Central Securities Depository (CSD) System
This Project aims to support the National Bank of Ethiopia (NBE) in acquiring and implementing a Central Securities Depository and Settlement (CSD) System. NBE will initially utilise the CSD system for government securities, with the ability for the system to be scaled for corporate debt securities, equities, and funds.
The CSD will ensure the safe custody of securities, ensure accurate record-keeping and reporting, reduce transaction costs, minimise risk, improve efficiency in the transfer of securities, facilitate the implementation of corporate actions, and improve the integrity of transactions. The CSD will promote increased liquidity and turnover in securities markets, increase transparency, and enhance investor confidence. An efficient and effective capital market will attract diverse investors, including foreign investors, increasing the volume and diversity of trades in Ethiopia’s capital markets.
This project aims to develop a policy and regulatory framework for the licensing and regulation of capital market service providers and self-regulatory organisations in Ethiopia.
