Sonia Essobmadje, chief of the Innovative Finance and Capital Markets Section with the Private Sector Development and Finance Division at the United Nations Economic Commission for Africa (UNECA), told Xinhua in Nairobi, the capital of Kenya, that capital markets in the continent are underdeveloped which limits the funding available for the private sector and public projects.

"Well-developed capital markets will also act as a gateway for foreign capital seeking investment opportunities in Africa," Essobmadje said on the sidelines of the conference on sustainable capital markets development in Africa.

Essobmadje said that vibrant domestic capital markets will reduce Africa’s reliance on foreign debt to finance development projects.

She revealed that less than 30 African countries have stock exchanges with most of them having few listed companies and low liquidity.

The UN official said that the UNECA is keen to expand the number of countries with stock exchanges so that African nations can raise capital through issuing debt and equity instruments.

Essobmadje observed that capital markets are a key enabler of achieving the UN’s Sustainable Development Goals through channeling savings to fund development projects.

She revealed that local currency capital markets also help African countries reduce reliance on external financial stocks.

According to Essobmadje, deep, liquid, efficient equity and debt markets are effective in mobilizing domestic and international capital and can help governments to finance budget deficits.