As aid budgets tighten and financing needs continue to grow, African economies face increasing pressure to mobilise domestic capital. This paper examines why stronger capital markets are becoming increasingly important and explores practical approaches that can help build more resilient domestic financial systems capable of financing long-term growth.
The paper argues that:
- Capital markets are no longer optional for African economies; they are becoming central to mobilising long-term domestic finance.
- Stronger pension and institutional savings systems are foundational to deeper capital markets.
- Public equity markets matter, but they are unlikely to be the main route for many smaller or frontier African markets.
- Hybrid structures, guarantees, pooled vehicles, and project preparation platforms may offer more practical pathways for mobilising domestic institutional capital.
Publication details
Authors
Evans Osano, Chief Financial Markets Officer, FSD Africa
Michael Fuchs, Consultant, FSD Africa
Series
Making capital markets work for Africa (Part one of three)
Published
May 2026
Audience
Policymakers, regulators, development finance institutions, institutional investors, and market practitioners working to strengthen domestic financial systems and mobilise long-term capital.
17 May 2026
