African financial markets have recorded their highest development score in a decade, according to the 2026 Absa Africa Financial Markets Index (AFMI). The report indicates that 21 of the 29 countries assessed improved their scores, reflecting progress across several areas of financial-market development.
The tenth edition of the index recorded an average score of 56, the highest since 2017 and six points above the index’s inaugural reading. The index is produced by the Official Monetary and Financial Institutions Forum (OMFIF) in association with Absa.
The findings provide an encouraging assessment of efforts by African economies to develop financial systems capable of supporting investment, business expansion and long-term economic growth.
However, improvements in an index do not mean that every country has deep financial markets or that businesses across the continent can easily access affordable finance.
Why financial-market development matters
Financial markets connect investors with governments and businesses seeking funding. They can provide access to capital through government bonds, corporate debt, equities and other investment instruments.
A more developed financial system can help businesses raise money for expansion without depending entirely on bank loans. It can also give pension funds, insurers and individual investors more opportunities to diversify their investments.
For governments, stronger domestic capital markets may provide additional options for financing infrastructure and other public projects.
The availability of long-term local-currency financing can be particularly important in African economies where borrowing in foreign currencies may expose businesses and governments to exchange-rate risks.
When a company earns revenue in local currency but owes money in dollars or euros, a depreciation in the local currency can make debt repayment more expensive.
Developing local financial markets can help broaden the range of funding options available to businesses and public institutions.
Progress across countries
The 2026 index found that 21 of the 29 assessed countries recorded improvements. This suggests that progress is taking place across a substantial portion of the markets included in the assessment.
However, the index is a comparative measure of financial-market development rather than a direct ranking of economic growth, employment or household welfare.
Countries may perform differently because of variations in regulatory frameworks, market infrastructure, investment opportunities, financial access and the availability of suitable financial instruments.
The results should therefore be interpreted as evidence of progress in the areas measured by the index, not proof that all financial-sector challenges have been resolved.
Liquidity remains a challenge
One continuing issue for many African financial markets is liquidity.
Liquidity refers to how easily investors can buy or sell an asset without causing a major change in its price. Markets with limited trading activity can make it more difficult for investors to enter or exit positions.
Low liquidity can also discourage international investors who need to trade large amounts of securities efficiently.
Increasing the number of listed companies, broadening the investor base and encouraging more active trading could help strengthen market depth.
Governments and regulators can also contribute by improving transparency, protecting investors and ensuring that market rules are applied consistently.
For companies seeking to raise capital, reliable financial reporting and strong corporate governance remain essential to building investor confidence.
Implications for Nigeria
Nigeria’s financial markets can benefit from wider participation by domestic and international investors, provided that investors have confidence in regulation, market infrastructure and economic policy.
The country’s banks, pension funds, insurance companies and capital-market institutions have important roles in mobilising savings and directing funds towards productive activities.
However, market development must be accompanied by improved access to finance for small businesses, which often struggle to meet lending requirements or attract investors.
More developed capital markets could create additional financing opportunities for businesses in manufacturing, agriculture, technology and infrastructure.
Conclusion
The 2026 Absa Africa Financial Markets Index offers evidence of progress in the development of financial markets across the countries assessed.
Maintaining that progress will require continued regulatory improvements, stronger investor protection, deeper trading activity and broader access to financing.
For African economies, the long-term objective is to build financial systems that do more than attract investment: they must also help businesses expand, create jobs and support sustainable economic development.
