• Equity capital markets underwriting fees in Sub-Saharan Africa fell 66% in the first half of 2025 to US$5.5 million, the lowest since records began in 2000.

• Overall investment banking fees in the region dropped 4% year-on-year to US$169.3 million, their weakest first-half since 2012, with debt and syndicated lending offsetting sharp declines in M&A and equity.

• South Africa remained the largest fee pool, while Barclays led the league table, highlighting the continued dominance of a few financial centres and banks.

Sub-Saharan Africa’s equity capital markets are enduring one of their most difficult periods on record, with underwriting fees collapsing to just US$5.5 million between January and June 2025, a decline of 66% compared to the same period in 2024. This marks the weakest first-half performance since records began in 2000 and underscores how fragile the region’s equity issuance pipeline has become. For nearly a decade, African issuers had struggled to maintain steady activity on public markets. Still, the latest figures highlight a sharp acceleration of this trend, pointing to structural weaknesses in local exchanges, thin investor bases, and an international environment that has turned increasingly risk-averse.

The sharp contraction in equity capital markets stands in contrast to developments elsewhere. Global ECM issuance has remained more resilient, with the Americas and parts of Asia-Pacific posting stable or even improved flows, supported by deep investor pools and robust pipelines of technology and consumer listings. In Asia, for instance, India and Greater China continue to attract capital despite volatility, while in the United States, several large technology-related deals have gone through in 2025.

Source: LSEG

By comparison, Africa’s issuance remains hampered by political uncertainty, persistent currency depreciation, and macroeconomic instability in key markets such as Nigeria, Ghana, and Egypt. These factors have left investors demanding steep discounts to participate in new share offerings, forcing many corporates to postpone or cancel transactions. At the same time, the limited liquidity of most African bourses has discouraged issuers from turning to the equity market as a serious financing avenue, leaving a funding gap that debt markets, private equity, and multilateral financing have increasingly filled.

The broader investment banking industry in Sub-Saharan Africa has not escaped the pressure. Fees across all products totalled an estimated US$169.3 million in the first half of 2025, down 4% from last year and the lowest first-half tally since 2012. Advisory fees earned from completed M&A transactions fell to US$59.3 million, a 22% decline and the weakest level in four years, reflecting a slowdown in deal completions as buyers and sellers struggled to bridge valuation gaps in a volatile macro environment.

In contrast, debt capital markets underwriting fees increased by 14% to US$26.8 million. In comparison, syndicated lending surged by 28% to US$77.7 million, confirming the pivot of both investors and issuers toward instruments perceived as safer, more liquid, and more predictable. Equity underwriting, by far the smallest component, became almost negligible in this landscape.

The geographical distribution of fees also reflects the concentration of activity in a few financial centres. South Africa alone accounted for 47% of all fees generated in Sub-Saharan Africa during the period, with Mauritius and the Ivory Coast each contributing around 13%. These markets benefit from relatively more developed institutions and a larger base of international investors, but their dominance also underlines the narrowness of the African investment banking opportunity set.

The league table of banks active in the region mirrors this trend, with Barclays leading in the first half of 2025 by capturing US$16.3 million in fees, equivalent to 10% of the total pool. Its leadership stemmed largely from cross-border transactions and syndicated lending rather than equity issuance, reflecting the shifting balance within the industry. Standard Bank and other regional players maintained their positions, but the scarcity of ECM deals left them heavily reliant on debt and advisory work.

Investor sentiment remains cautious at best. Global capital has flowed back toward developed markets where high interest rates and abundant liquidity provide more secure returns, while frontier equity markets are viewed as too illiquid and risky. African corporates in fast-growing sectors such as fintech, telecoms, and renewables had been expected to supply IPOs. Still, most have either postponed listings or opted for private capital instead, where negotiations over valuation and control are easier. This retreat leaves public markets underdeveloped and denies African exchanges the depth they need to function as engines of growth.

For international and regional investment banks alike, the challenge is not only cyclical but structural. The dominance of debt and lending suggests that African capital markets remain skewed toward financing forms that do not require broad retail or institutional participation. Equity issuance, which in theory should support wider ownership and deeper market development, remains an afterthought. Unless African governments implement reforms that expand domestic institutional investor bases, improve foreign exchange regimes, and boost market transparency, equity markets will continue to lag.

The decline in ECM fees to just US$5.5 million in the first half of 2025 is therefore more than a passing slump. It is a signal of how far the region’s equity markets have retreated from their peak in the mid-2010s when issuance volumes were regularly above US$10 billion and the number of deals topped twenty per year.

From that high watermark to the present trough, the decline has been dramatic, and recovery appears uncertain in the absence of both global monetary easing and local reforms. For the moment, investment banks are bracing for another lean year, as the region’s capital markets continue to rely overwhelmingly on debt. At the same time, the once-anticipated wave of African IPOs remains elusive.

Idriss Linge