*Says Nigeria, others must shift focus from funding gap to deployment challenge
Festus Akanbi in Nairobi
Africa’s domestic capital base has risen to over $2 trillion, surpassing cumulative external financing flows over the past decade, in what analysts have described as a turning point in how the continent funds its growth and industrialisation.
This was disclosed in the 2026 State of Africa’s Infrastructure Report released by the Africa Finance Corporation at the ongoing The Africa We Build Summit held in Nairobi, Kenya, today.
According to the report, total external financing to Africa between 2014 and 2024 stood at approximately $1.7 trillion, significantly below the estimated value of domestic non-bank capital pools now available across the continent.
The report noted that the development challenge facing Africa has consequently shifted from capital mobilisation to intermediation—converting available savings into infrastructure, industry and other productive investments.
President and Chief Executive Officer of the Africa Finance Corporation, Samaila Zubairu, said the continent’s problem was no longer access to capital but the absence of effective systems to channel funds into viable projects.
“The constraint is no longer capital—it is intermediation. We have the savings, but not yet the systems to channel them into infrastructure and industry at scale,” he said.
Providing a breakdown, the report stated that pension and insurance assets across Africa have now exceeded $1 trillion for the first time, while public development bank assets stood at $276 billion and sovereign wealth funds at $164 billion.
It also noted that central bank reserves increased from $480 billion in 2024 to $530 billion in 2025, supported partly by improved commodity performance and rising gold accumulation, which now accounts for about 17 per cent of total reserves.
Despite this growth, the report observed that a significant portion of domestic capital remains concentrated in short-term and low-risk instruments, particularly government securities, due to regulatory structures, limited investment pipelines and weak risk-sharing mechanisms.
For Nigeria, this trend remains evident, with pension funds and institutional investors largely skewed towards federal government instruments, leaving infrastructure and real sector investments underfunded.
The report warned that unless this imbalance is addressed, the continent would continue to face a disconnect between available capital and actual development outcomes.
Meanwhile, the report highlighted a steady decline in external financing flows, reinforcing the need for Africa to rely more on domestic capital.
Official development assistance to Africa dropped from $83.8 billion in 2020 to $73.5 billion in 2023 and is projected to decline further, while global aid fell by 23.1 per cent in 2025, the sharpest contraction on record.
It added that sovereign debt issuance has also weakened, falling from over $29 billion in 2018 to between $4 billion and $6 billion annually in recent years, while foreign direct investment has stagnated at about $45 billion to $55 billion yearly.
The report stressed that external capital should now be viewed as complementary rather than central to Africa’s development financing.
On infrastructure development, AFC noted that future growth would depend on integrated systems rather than standalone projects, pointing to transport corridors, energy networks and digital infrastructure as key drivers.
It cited developments in East Africa, including expanding port capacity and rail connectivity, as well as aviation investments contributing about $5.5 billion to GDP across countries such as Kenya, Rwanda and Ethiopia.
For Nigeria, analysts say the report underscores the need to move beyond isolated infrastructure projects towards coordinated systems that link transport, power, industry and trade.
The report also drew attention to Africa’s vulnerability to global shocks, noting that the continent still imports over 70 per cent of its refined fuel and spends about $230 billion annually on essential imports including food, fuel, fertiliser and industrial inputs.
It warned that recent global disruptions had exposed the cost of fragmented infrastructure systems and weak domestic production capacity.
In the digital sector, the report said while connectivity has improved, there remains a significant gap in backbone infrastructure such as fibre networks, data centres and enterprise platforms required to drive productivity and job creation.
It concluded that Africa’s development challenge is increasingly institutional, urging governments to strengthen frameworks that can mobilise and deploy domestic capital effectively.
“Africa is not capital-poor—it is capital-rich but system-poor,” Zubairu added.
Analysts believe Nigeria, given its economic size and financial depth, is well positioned to lead this transition, provided it addresses structural bottlenecks that hinder long-term investment in infrastructure and industry
🚨 BREAKING: Watch the full clip here ➤
