Africa has the money to build the Africa we want
Africa is sitting on $4trn of accessible capital; even a small percentage of this wealth can transform economies and solve almost all our infrastructure needs. What is needed now is action by all the parties concerned.
In 2025, the world witnessed Africa at its most defining moment since gaining independence. The traditional aid-dependent model had faltered, with official development assistance shrinking by 23.1% and debt servicing consuming a staggering 17% of state revenues in many African nations. With a development financing gap of $400 billion annually, Africa possessed a vast pool of domestic capital, estimated at over $2 trillion.
This capital, hailing from pension funds, insurance assets, public development banks, sovereign wealth funds, and central bank reserves, was not being utilized effectively.
Recognizing this potential, African leaders took decisive action in February 2026, endorsing the New African Financial Architecture for Development (NAFAD). This framework aimed to effectively leverage the continent's resources, tapping into domestic savings, building guarantee and shared-risk systems, and deepening local capital markets. The AfDB President, Dr Sidi Ould Tah, emphasized the goal of making every dollar work like ten.
Unlocking this capital required more than just political will; it demanded bankable projects, risk-sharing mechanisms, and confidence in preparedness. Asset recycling emerged as a promising tool, enabling governments to monetize existing assets like roads, ports, airports, and energy networks for new infrastructure investments. In Senegal, for example, 40% of assets could be recycled to alleviate the public debt burden.
Zambia took a pioneering step by restructuring its debt to fund energy sector investments, investing $275 million in energy infrastructure. This model, which intertwined debt management with strategic investments, could be replicated across the continent.
These innovative financing mechanisms were not just about raising funds; they were strategic tools aligned with Africa's development agendas, such as the Programme for Infrastructure Development in Africa (PIDA) and the Programme for Accelerated Industrial Development of Africa (PAIDA). The Luanda Financing Summit and the Africa50 Fund exemplified these efforts, attracting significant investments towards PIDA implementation projects.
The future of Africa's development hinged on the courage to deploy its capital effectively, with the potential to transform infrastructure and accelerate industrialization.
Written by urgent.news from Africa Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
