For return-hungry Investors, Africa’s capital markets offer plenty of growth opportunities.
After years of sitting on the side-lines, Global Investors are finally gravitating towards Africa, as liquidity risk becomes less of a problem. However, market reform in the region is still a work in progress, as Helen Johnson, COO, Head of Business Development, MYRIAD Group Technologies (MGTL) discovered during The Network Forum’s (TNF) Africa Meeting in London on April 21-22.
Investors zero in on Africa as Liquidity improves
Africa is “now a fully weighted staple, rather than a speculative add” [1] of Institutional Investors’ portfolios. According to The Value Exchange, 74% of Investors plan to increase their Africa allocations between now and 2028, whilst 12% of Institutions said they have already reached their maximum strategic exposure, up from 5% in 2024. [2]
Speakers at TNF said flows are increasing because the barriers to entry are receding.
A region once synonymous with FX illiquidity is becoming more accessible for Foreign Investors. Whereas in 2024, 58% of Investors told The Value Exchange that FX illiquidity was their biggest issue when investing in Africa, 50% say the situation is now much better. [3]
Nigeria, for example, has introduced a series of measures to support easier FX access and capital repatriation. Although the reforms initially sparked a sharp fall in the Naira’s value and unleashed FX volatility, International Benchmarks have rewarded Nigeria for its liberalising efforts, with FTSE Russell restoring the country to Frontier Market Status, having previously been Unclassified. [4]
Despite these structural improvements, illiquidity continues to be fairly entrenched in a number of the smaller African markets, an issue Experts at TNF said is compounded by limited listing activity, a general reluctance among local Pension Funds to offload their public holdings, and a lack of tradeable investment products.
Market Integration and Post-Trade Reform yield mixed results
If liquidity silos are to be avoided in Africa, market integration and Post-Trade reforms need to be accelerated, shared Panellists at TNF.
There are some positive developments happening in Africa.
One Speaker said momentum is building up behind the Africa Exchanges Linkage Project (AELP), a regional integration scheme designed to make cross-border IPOs and securities trading more frictionless across the participating Stock Exchanges.
Post-Trade, however, is more fragmented, with dozens of competing Central Securities Depositories (CSDs) scattered across the continent. Some individual countries, despite their thin trading volumes, might even have more than one CSD in the local market. Whilst a lot of the CSDs at TNF talked openly about their ambitious modernisation plans and growing Swift connectivity, the lack of CSD interoperability and interconnectivity can sometimes create challenges for Foreign Institutions when investing across multiple African markets.
For costs to come down, there needs to be greater consolidation of African Financial Market Infrastructures (FMIs). Clients flagged privately that although a regional/pan-African FMI is a nice idea in principle, vested interests mean it is unlikely to happen in practice.
Securities Settlements in Africa – The Elephant in the Room
Settlement compression was an emotive issue at TNF Africa.
While Speakers were unequivocal that T+1 is a step in the right direction (e.g. by reducing settlement duration risk, mitigating counterparty risk, creating conditions ripe for collateral and liquidity optimisation, etc), not all countries are ready for shorter settlement cycles.
This comes as Nigeria – despite having only adopted T+2 in November 2025 – announced it is pushing ahead with T+1 on May 29, 2026 – bringing the country into line with North America (and Europe from 2027). Network Managers made their feelings clear at TNF that Nigeria should either reconsider its decision on T+1 altogether or delay implementation.
In addition to giving the Industry next to no time (two months) to prepare for the changes, Network Managers said Nigeria’s Post-Trade Infrastructure is not automated enough to cope with T+1’s STP requirements. Others warned Firms trading Nigerian securities are at risk of suffering from an FX funding crunch once T+1 goes live, especially given the country’s chequered FX liquidity track record.
In contrast to T+1’s rollout in the US, where the Depository Trust & Clearing Corporation (DTCC) provided the Industry with regular status updates on what was happening, a Network Manager complained T+1 communications coming out of Nigeria have been far and few between.
A badly executed T+1 implementation could introduce new risks into the Post-Trade value chain, or make existing problems worse, but within a compressed settlement window. [5]
Operational Resilience remains top of mind
With systemic shocks now becoming so normalised, Operational Resilience continues to be a strategic priority for Network Managers.
If Agent Banks are to pass their Due Diligence assessments, they will need to demonstrate that Operational Resilience is not just a tick box exercise.
An effective Operational Resilience strategy is contingent on Financial Institutions having full visibility over their Third-Party relationships and other critical dependencies. If Firms are storing information about Third-Party relationships just on Excel without looking through to their 4th or 5th party dependencies, then this could seriously undermine their Operational Resilience planning.
The ability for Firms to withstand extreme events hinges on a well-thought-out approach to scenario testing. Financial Institutions should carry out Operational Resilience exercises based on previous real-world examples of cyber-attacks, mass power-outages, or political unrest.
Key person risk is another business challenge that needs to be carefully managed.
In minor markets with low levels of STP or at small Companies, the loss of a key person(s) can have a hugely disruptive impact on Firm-wide operations. This risk can be mitigated, but only if Organisations take succession planning seriously.
[1] The Value Exchange – The World to Africa 2026: Navigating the new frontier of investment stability and private market momentum
[2] The Value Exchange – The World to Africa 2026: Navigating the new frontier of investment stability and private market momentum
[3] The Value Exchange – The World to Africa 2026: Navigating the new frontier of investment stability and private market momentum
[4] Business Insider Africa- April 17, 2026 – Global index provider restores Nigeria to Frontier Market Index boosting investor outlook
[5] Standard Bank – April 15, 2026 – Financial settlement: T+1 is not a race: Why African markets must prioritise readiness over speed
