As foreign direct investment (FDI) and development assistance to Africa continue to decline, stakeholders across the continent are intensifying efforts to mobilise local financial resources as a path to achieving true financial sovereignty.
This urgent call to harness domestic capital was the central theme of discussions at the African Development Bank Group’s (AfDB) 2025 Annual Meetings, where policymakers, development financiers, and thought leaders gathered to chart a new financial trajectory for the continent — one rooted in African-driven solutions and investments.
According to the Bank, FDI into Africa fell by 12% to $40 billion, while development assistance dipped by 10%, deepening concerns about the continent’s reliance on external funding. Despite facing an infrastructure financing gap estimated between $68 billion and $108 billion annually, Africa still attracts just 2% of global investment in infrastructure.
However, experts argue that Africa holds the key to its own transformation. “The real question is not whether the capital exists – it does. The question is how to mobilise it on a large scale for productive, high-impact investments,” said Solomon Quaynor, AfDB Vice-President for Private Sector, Infrastructure & Industrialisation.
He noted that African institutional investors — including pension funds, sovereign wealth funds, insurance firms, and central banks — collectively manage over $2.1 trillion in assets. “If just 5% of these assets were channelled into infrastructure and private sector ventures, it could unlock more than $100 billion in long-term capital,” Quaynor added.
The side event, hosted by AfDB’s Resource Mobilisation and Partnerships Department in collaboration with the Bank’s Making Finance Work for Africa initiative, spotlighted innovative, homegrown models for capital mobilisation. One such example is Nigeria’s InfraCredit, which has enabled over $300 million in long-term, local currency infrastructure financing.
“We have not recorded any losses on a portfolio of more than 20 projects across 12 sectors in eight years,” noted Chinua Azubike, CEO of InfraCredit, challenging assumptions that infrastructure investments in Africa are excessively risky.
Tafara Ethiopis, Vice-President of the International Finance Corporation (IFC), underscored the importance of recalibrating risk-sharing between public and private sectors to improve project bankability. “It is essential to balance risks and returns appropriately to unlock private capital,” he said.
Other panellists identified key constraints to institutional capital mobilisation, ranging from governance gaps to poor project preparation. Boitumelo Mosako, CEO of the Development Bank of Southern Africa (DBSA), stressed the role of governance and transparency in reducing investor risk.
Timi Agama, Director General of Nigeria’s Securities and Exchange Commission (SEC), emphasised the need for trust-building through regulatory reforms, investor protection, and improved financial literacy. Meanwhile, Denis Charles Kouassi, CEO of Côte d’Ivoire’s National Social Security Fund, advocated aligning pension fund investments with national development strategies, noting that, “All the income we generate is reinvested directly into the national economy.”
The AfDB, through instruments like the Capital Markets Development Trust Fund and partnerships with global stakeholders, is leading initiatives to tap African institutional capital for sustainable development.
“Yes, we need governance and accountability. But as Africans, we also need to learn to trust each other,” Mosako stated, echoing a broader sentiment on the need for intra-African collaboration.
In his concluding remarks, Quaynor issued a rallying call: “The moment calls for vision. It also calls for innovation. And above all, it calls for action. Let us pool our capital, our ideas, and our will, to build an Africa where infrastructure becomes a lever for prosperity, not a drag on it.”
