African financial markets have reached their highest development score in a decade, with 21 of the 29 countries assessed recording improvements in 2026, according to the latest Absa Africa Financial Markets Index (AFMI).

Produced by OMFIF in association with Absa, the tenth edition of the Index recorded an average score of 56, the highest since 2017 and six points above its inaugural reading.

The findings point to improvements in market infrastructure, foreign exchange resilience, transparency and financial product development, although challenges remain in translating these advances into deeper liquidity and broader investor participation.

“The significance of these reforms lies in what financial markets can now support,” said Anthony Kirui, Head of Global Markets, Africa Regions, Absa Corporate and Investment Banking.

“Stronger foreign exchange frameworks, improved transaction infrastructure and more sophisticated instruments have expanded the options available to businesses and investors. The next challenge is ensuring these developments translate into more active markets, reliable pricing and greater confidence in the execution of financial transactions.”

The report highlights the evolution of Africa's bond markets over the past decade. In 2017, only 11 of the 17 countries assessed had established secondary bond markets, with trading concentrated in a small number of economies.

Excluding South Africa, traded bonds averaged just 14% of outstanding bonds, reflecting the limited depth of domestic capital markets at the time.

Since then, African markets have expanded their range of financial instruments to include derivatives, sukuk and sustainable finance products, supported by improvements in settlement infrastructure and regulatory frameworks.

Pension fund assets across economies covered by the Index increased by nearly $70 billion in the latest reporting period, representing year-on-year growth of 24%, although much of the increase reflected higher asset valuations.

Meanwhile, 16 economies improved their foreign exchange reserve adequacy scores, while 12 recorded advances in financial product diversification.

Despite these gains, the Index finds that growth in market capitalisation, bond issuance and the availability of financial products has not consistently resulted in stronger secondary-market activity or wider investor participation.

“The growth of financial markets does not automatically translate into greater depth, liquidity or more effective capital mobilisation,” said Jeff Gable, Chief Economist and Head of Fixed Income Research at Absa Corporate and Investment Banking.

“For international investors, what matters is whether reforms are improving market accessibility, strengthening investor participation and enabling capital to move more efficiently.”

The report suggests that market accessibility, liquidity and the ability to mobilise domestic and international capital remain important measures of financial market development.

“A decade of evidence provides a clearer picture of where structural progress is taking hold, allowing investors to assess opportunities based on the conditions within individual African economies rather than broad perceptions of continental risk,” Gable added.