In Abidjan, Côte d’Ivoire this May, as delegates at the African Development Bank’s (AfDB) Annual Meetings debated economic futures, a new consensus emerged: Africa’s next growth wave will be capitalized not by aid, but by capital markets.
New research from CFA Institute Research & Policy Center that was released at the meeting examines the case for mobilizing private capital to support the structural investment needs of sub-Saharan Africa. The research identifies and analyses existing barriers to the development of capital markets. It offers a series of recommendations for regulators, policymakers, the investment industry, and international institutions active in the region.
The report’s country-level contributors, many of them CFA charterholders, bring deep local expertise to the report’s insights. “Their work, spanning 11 jurisdictions, helped ensure the recommendations reflect both regional diversity and shared structural needs,” according to Olivier Fines, CFA, Head of Advocacy for EMEA at CFA Institute.
“Ultimately, the report aims to spark dialogue and coordination between those who shape policy and those who allocate capital,” adds Fines, co-editor of the new research with Phoebe Chan, Capital Markets Policy Research Specialist, EMEA Advocacy, CFA Institute.
Key Takeaways for Global Investors
- Africa is young, fast-growing, and under-capitalized: Development and integration of capital markets in the region is essential.
- Small- and medium-sized enterprises (SME) are the backbone of the economy, yet struggle to access efficient forms of capital: We think these challenges are solvable.
- Private market channels may provide the flexible capital structure required for the new economy, largely based on intellectual property and technology.
- Policy reforms and partnerships are already under way: Coordination between governments, regulators and the investment industry will be of the essence in order to build trust and predictability.
- Back capacity building, not emergency solutions: Channel capital into skills, data, and infrastructure that power long-term development.
Africa Isn’t Waiting—Investors Shouldn’t Either
Africa is one of the fastest-growing regions in the world, and the optimism on the ground is real, Fines reports. “But investment strategies must be grounded in the region’s realities — its legal structures, data environments, and human capacity. That’s why our report focuses on actionable insights.”
Fines was impressed with the level of optimism at the AfDB meeting. “It seemed to me like people were in general moving away from emergency discussions to the concept of capacity building. Can we move now to the next stage of this development? Can we focus on human capital development? Can we focus on research, on data aggregation to provide the market with the data that it needs to invest with confidence in what is likely to be one of the fastest growing regions in the world?”
Why Private Capital, Why Now?
Africa’s demographic and economic story is compelling. It’s the youngest, fastest-urbanizing region in the world, with rising consumer demand and entrepreneurial energy. However, traditional public market funding — and even donor-led models — have fallen short in meeting the region’s capital needs, Fines explains. “How do we fund, how do we help those entrepreneurs, is very much what we would like to solve through capital markets and provide innovative solutions through the concept of private markets, or private-public partnerships.”
The report makes a focused case for private markets including private equity, venture capital, and private credit as critical engines of capital formation. “These markets offer flexibility, innovation, and faster deployment of funding, especially for SMEs that drive job creation and local economic growth,” Fines argues. But for these private channels to succeed, investors need predictable legal frameworks, transparent corporate governance, robust financial infrastructure, and skilled local talent, he adds.
Barriers—or Opportunities in Disguise?
In both the report and AfDB discussions, key barriers to capital market development were identified. “For global investors, these aren’t just red flags — they’re indicators of where smart policy action and collaborative investment can unlock long-term value,” Fines advises.
These barriers include:
- Human capital gaps: Africa’s young population presents huge potential, but the region needs more financial professionals, market experts, and entrepreneurs trained in investment fundamentals.
- Data and information asymmetries: Investors face major obstacles in accessing reliable, comparable financial data across countries and sectors.
- Regulatory uncertainty: Inconsistent or opaque rules deter both local and foreign investment, especially in private assets.
- Weak public-private coordination: New policies often lack buy-in from the private sector, reducing effectiveness.
- Limited access to SME financing: Banks often underserve high-growth businesses due to risk constraints or lack of tailored financing tools.
Key Policy Recommendations
The report emphasizes that a thriving private capital market depends on a well-functioning ecosystem. It advocates for a cohesive package of reforms, including clearer and more consistent cross-border regulations to enhance investor confidence, stronger corporate governance to improve transparency and accountability, and broader access to education and training to build local financial expertise. It also highlights the need for more effective public-private collaboration to channel investment into strategic sectors and infrastructure, as well as greater efforts to educate retail and institutional investors to foster trust and encourage wider market participation.
“By embracing these reforms, African countries can create an environment where private capital flows more freely, and where both economic development and investor confidence thrive,” according to Fines.
AfDB Meeting: A Strategic Launch Point
The African Development Bank’s Annual Meetings in Abidjan, where the report was launched, was an event that underscored growing momentum to mobilize private capital across the continent. As Fine notes, “The main theme of the African Development Bank this year was ‘Make Africa’s capital work better for Africa.’” That message closely aligned with the goals of the report, which was developed to inform regional policy direction and strengthen coordination between the public and private sectors.
The timing was also significant. With a leadership transition at the AfDB and renewed interest in long-term development financing, the meeting provided a strategic platform to elevate market-based solutions.
For global investors, the signal is clear: Africa’s moment is here. The only question is, will you be part of building it?
To learn more, check out our AfDB Meetings Hub — complete with the full report, Capital Formation in Africa: A Case for Private Markets, videos, author blogs, and related research.
