Investor confidence is gradually returning to Africa despite recent global economic uncertainty, with experts highlighting the growing role of custody services in facilitating safe and efficient cross-border investments.
Across key African markets, the signs are clear. In Kenya, easing inflation and macroeconomic stability have spurred a 12% surge at the Nairobi Securities Exchange in 2025. In South Africa, investor sentiment has defied expectations, with the country rising to 7th place in Kearney’s 2025 Foreign Direct Investment Confidence Index. Analysts say this resurgence is partly fueled by structural reforms and strong bond returns, which have reignited trust in African markets.
Yet, experts argue that sustained growth will depend heavily on building robust investment infrastructure—particularly custody services that safeguard assets, manage compliance, and streamline trade settlements.
A study by Mennonite Economic Development Associates (MEDA) across 14 African countries revealed that nearly 80% of African investment vehicles are domiciled outside the continent. Bringing these funds back home, the report suggests, could significantly boost foreign direct investment (FDI), catalyse domestic capital, and unlock opportunities for small and medium enterprises (SMEs)—a sector crucial for youth employment in Africa, where over 70% of the population is under 30.
While FDI inflows have grown modestly in recent years, much of it remains concentrated in extractive industries and unevenly spread across the continent. To attract wider investments, the African Centre for Economic Transformation (ACET) recommends diversifying into greenfield sectors, fostering job creation, and expanding regional trade agreements. The African Continental Free Trade Agreement (AfCFTA), once fully operational, is expected to play a central role in creating larger and more attractive markets for investors.
For this vision to succeed, the private sector’s role is critical. Custody services—provided by banks and financial institutions—ensure secure asset management, efficient settlements, and transparency across borders. Industry players say the role of custodians has now expanded beyond safekeeping to include trade facilitation, regulatory compliance, and advisory services.
Absa Investor Services, a subsidiary of Absa Group, has been at the forefront of this transformation. The company has recently expanded its operations beyond South Africa to Mauritius and Kenya, with further plans to enter East and West African markets. Its latest launch in Kenya targets pension funds, investment firms, unit trusts, insurance companies, and SACCOs, capitalising on a growing pool of assets under management—already valued at over Ksh 2.2 trillion in pensions and Ksh 389 billion in unit trusts by December 2024.
“With cloud-based platforms and operations in 88 global markets, we are not only safeguarding investments but also enabling faster, more efficient capital flows across Africa,” said Sabir Ballim, Group Head of Investor Services at Absa CIB, and Lydia Wangari-Karanja, Head of Transactional Banking at Absa Bank Kenya, in a joint statement.
As investor appetite strengthens, experts believe the expansion of custody services will be pivotal in boosting transparency, deepening capital markets, and integrating African economies into the global financial system.
“Africa is at a pivotal stage of economic transformation,” Ballim and Wangari-Karanja noted. “Custodians are no longer just asset keepers—they are enablers of investment confidence, regional integration, and sustainable growth.”
