• Around $4 trillion held by African financial institutions
• Capital fails to translate into infrastructure and industrial projects
• Weak project pipelines and risk concerns limit investment flows

Africa holds an estimated $4 trillion in capital across banks, pension funds, insurers, and sovereign institutions, yet this financial base continues to fall short of supporting large-scale infrastructure development.

According to the Africa Finance Corporation (AFC), the issue is no longer a lack of capital but the continent’s limited ability to channel it into productive investments. Investors often favor low-risk sovereign securities, while infrastructure projects struggle to meet “bankable” standards due to weak technical preparation and insufficient guarantees.

A structural financing gap

AFC chief executive Samaila Zubairu said in a report released on April 23 that this growing capital base has not translated into the level of industrialization, infrastructure, or jobs needed for sustained economic transformation.

The challenge lies in the absence of effective systems to direct domestic savings toward large-scale infrastructure and industrial projects. As a result, local capital remains largely disconnected from the real economy.

The investment gap remains significant. While China allocates about 14% of its GDP to infrastructure, Africa invests around 4%. The African Development Bank estimates that the continent faces an annual infrastructure financing gap of about $170 billion, reducing economic growth by up to two percentage points each year.

Toward integrated regional corridors

Beyond financing constraints, the design of infrastructure projects is also under scrutiny. The focus is shifting away from isolated national projects toward integrated regional corridors that can support trade under the African Continental Free Trade Area (AfCFTA).

For Lerato Mataboge, African Union Commissioner for Infrastructure and Energy, the priority is now operational efficiency. She said the next phase should not focus only on expanding assets, but on ensuring they function as integrated trade corridors capable of moving goods reliably and at scale.

With 48 member countries and about $19 billion invested since its creation, the AFC aims to demonstrate that African capital can be mobilized more effectively to support industrial development and infrastructure across the continent.

Fiacre E. Kakpo