The Kenyan beverages giant refinanced an existing KSh 11 billion corporate bond through a medium-term note priced at 11.8%, marking the first issuance under a newly approved KSh 20 billion programme. The timing was deliberate. Kenya 10-year government bond yield had eased to approximately 13.3%, its lowest level since mid-2022 — a macro shift that made the economics of refinancing workable again after a prolonged period of elevated borrowing costs.
Demand was robust. Banks, fund managers, pension schemes and retail investors all participated actively, pushing the offer to an oversubscription rate of 152.4%. That investor appetite allowed East African Breweries Limited, EABL, to upsize the issuance to KSh 16.7 billion — well above the original target.
Liquidity was always there — the conditions were not
The EABL deal underscored a point that many market practitioners have long argued: liquidity does exist in African markets, but it surfaces selectively, for the right opportunity at the right moment. What has changed in recent quarters is that post-pandemic interest rate peaks appear to be easing, and that shift is beginning to alter borrower behaviour in a meaningful way.
As the cost of funding becomes less punitive, investment decisions that were previously shelved are returning to the table — including acquisitions and expansion plans where financing plays a critical enabling role. Companies are beginning to think more creatively about funding structures and where capital is best deployed across their businesses.
As borrowers grow and their funding requirements evolve, they typically move beyond traditional bank facilities and begin exploring a wider range of instruments. That shift often leads into syndicated lending — a market that, according to the Organisation for Economic Co-operation and Development OECD, has expanded significantly across Africa over the past two decades, with issuance and outstanding volumes nearly doubling. These transactions tend to be more nuanced, requiring a higher degree of financial sophistication from both issuers and their advisers.
The bond market: higher rewards, higher barriers
Accessing Africa corporate bond markets is considerably more involved than drawing on a syndicated loan. An issuer must prepare a formal issuance programme, appoint arrangers, external legal counsel, trustees, paying agents and calculation agents, engage with a broad investor base, comply with listing rules, and meet ongoing disclosure requirements around financial reporting. The administrative and compliance burden is real.
It is no surprise, then, that Africa corporate bond market has struggled to gain traction. According to OECD data, outstanding corporate bond amounts on the continent fell from USD 52 billion in 2010 to USD 38 billion in 2024 — a contraction that runs counter to the growth story the continent is often associated with. More starkly, despite Africa contributing roughly 2.5% of global gross domestic product, the continent accounts for just 0.1% of global corporate bonds outstanding.
The gap between potential and reality is wide, but it is not primarily a regulatory problem. Most African markets have relatively straightforward issuance and listing requirements. What determines whether a company ultimately accesses the bond market — or stays in the loan market, which is typically easier to navigate and more adaptable — comes down to scale, institutional knowledge and flexibility. The loan market remains the path of least resistance for many issuers, and for good reason.
Blended finance: the bridge between two worlds
In some cases, bond market access carries a meaningful cost advantage — sometimes at levels the loan market simply cannot replicate. In practice, this tends to apply to specific tranches of a transaction rather than the full financing structure. The practical result is an increasing prevalence of blended financing — arrangements that combine lower-cost market instruments with loans or other tools that provide flexibility, tenor or risk coverage the bond market cannot accommodate alone.
This approach is gaining ground across the continent. Research by Convergence, a global network focused on blended finance, found that Africa accounted for approximately 40% of global blended finance transactions in 2024, representing roughly a third of total volumes transacted. The figure reflects a broader evolution in African capital markets toward more structured, composite solutions, rather than dependence on a single instrument or lender relationship.
Looking ahead, innovation in Africa capital markets is likely to focus on developing new products and demonstrating the capacity to execute complex transactions — because demonstrated execution matters as much as theoretical access. When East African Breweries first entered the Kenyan bond market in 2021, it did so in a market that had seen no corporate issuance in nearly five years. That transaction helped reopen the market. It sent a signal to other potential issuers: investors were active, pricing could be made to work, and execution was achievable.
Outside South Africa, capital markets across much of the continent remain relatively shallow. That depth problem limits how effectively domestic savings can be channelled into long-term productive investment. Equity markets are small and thinly traded. Bond markets lack the pricing references and secondary-market activity that make it easier to establish benchmarks and attract repeat issuance. Bridging that gap — building the infrastructure, the investor base and the institutional confidence to support deeper markets — is where the real development agenda lies.
For now, EABL deal offers something that is often undervalued in frontier markets: a proof of concept. And in capital markets, proof of concept has a way of becoming a template.
