Africa needs $170 billion yearly to close infrastructure gap

Arusha. Africa requires between $130 billion and $170 billion annually to bridge a widening infrastructure gap that is estimated to reduce the continent’s economic growth by two percent annually and productivity by up to 40 percent, a Tanzanian minister has said.

Speaking on July 9, 2025 at the Africa Social Security Association (ASSA) Leadership Forum Minister of State in the Prime Minister’s Office (Labour, Youth, Employment and Persons with Disability), Mr Ridhiwani Kikwete, called for innovative financing models to address the shortfall.

The forum is held ahead of the 14th ASSA International Conference. Quoting figures from the African Development Bank (AfDB), the minister said the infrastructure financing gap remains a major obstacle to Africa’s sustainable development agenda.

“Infrastructure is fundamental to economic growth, social development, and regional integration. However, Africa continues to face significant challenges in funding and implementing projects, which undermines broader development objectives,” said Mr Kikwete.

He urged African governments to collaborate more closely with social security institutions and private investors to unlock domestic capital.

“Many African nations rely heavily on external borrowing. This forum provides an opportunity to explore innovative approaches to leverage domestic resources, particularly social security funds, to narrow this gap,” he added.

Mr Kikwete said this year’s ASSA forum places a strong emphasis on infrastructure as a catalyst for inclusive growth.

He pointed out that Tanzania’s social security funds are already contributing to transformative national projects including buildings, bridges, and other economic and social facilities.

“I am confident that social security investments can both drive national development and safeguard contributors’ interests. These funds can play a critical role in tackling Africa’s infrastructure deficit,” he noted.

He called on ASSA to consider establishing a regional investment mechanism to mobilise funding for infrastructure development.

ASSA Chairperson Mr Muyangwa Muyangwa said the conference, which is set to be officially opened by Vice President Dr Philip Mpango, will address structural and financial hurdles slowing the continent’s development.

“The perception of high risk continues to deter investment in Africa. Through this forum, we aim to develop practical solutions to unlock capital flows,” he said.

ASSA Vice Chairperson and Workers Compensation Fund (WCF) Director, Dr John Mduma, stressed the importance of harmonising investment regulations across African countries to attract long-term capital.

“We are hopeful that the resolutions from this gathering will offer actionable guidance for improving the investment climate and financing infrastructure for inclusive growth,” he said.