Nairobi. Africa is increasingly positioning itself to finance its own development, with domestic capital pools now exceeding external funding flows over the past decade, a new report by the Africa Finance Corporation (AFC) shows.
According to the State of Africa’s Infrastructure Report 2026, Africa’s non-bank domestic capital has surpassed $2 trillion, outstripping about $1.7 trillion in cumulative external inflows recorded between 2014 and 2024.
The report was launched in Nairobi during The Africa We Build Summit, co-hosted by AFC and Kenyan President William Ruto.
Presenting the report summary on Thursday, April 23, 2024, AFC chief economist and director of research and strategy, Dr Rita Babihuga Nsanze, said Africa has sufficient resources but lacks integrated systems to deploy them effectively.
“The challenge of Africa is not resources but the absence of integrated infrastructure systems,” she said.
AFC President and Chief Executive Officer Samaila Zubairu said the central challenge facing Africa is no longer capital mobilisation, but its effective deployment.
“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.
The report shows that domestic institutional capital has grown significantly, with pension and insurance assets exceeding $1 trillion for the first time.
Public development banks hold assets worth $276 billion, while sovereign wealth funds account for $164 billion.
Meanwhile, central bank reserves rose to $530 billion in 2025, up from $480 billion in 2024, supported partly by increased gold holdings.
Gold now constitutes about 17 percent of total reserves, compared to less than 10 percent in 2022–2023.
Despite this growth, much of the capital remains concentrated in short-term, low-risk investments such as government securities, reflecting limited pipelines of bankable projects and regulatory frameworks that prioritise liquidity.
The report highlights a steady decline in external financing, reinforcing the need for a domestic-led model.
Official development assistance dropped from $83.8 billion in 2020 to $73.5 billion in 2023, with further reductions expected.
At the same time, sovereign borrowing has fallen sharply, from over $29 billion in 2018 to between $4 billion and $6 billion annually in 2022 and 2023.
Foreign direct investment has remained relatively stagnant at between $45 billion and $55 billion per year, well below the continent’s financing needs.
As a result, external capital is increasingly seen as complementary rather than central to Africa’s development.
The report identifies integrated infrastructure systems as the most promising avenue for deploying capital at scale.
Rather than standalone projects, AFC argues for coordinated investments linking energy, transport, industry and digital infrastructure into cohesive, demand-driven ecosystems.
In East Africa, this approach is already taking shape. The port of Mombasa handles more than 45 million tonnes of cargo annually, while expanding rail networks such as the Naivasha–Kisumu corridor are improving inland connectivity.
In aviation, the sector across Kenya, Rwanda, and Ethiopia contributes a combined $5.5 billion to gross domestic product and supports around one million jobs, underscoring its role in boosting trade and integration.
Energy systems are also evolving, with cross-border projects such as the Ethiopia–Kenya interconnector improving regional power distribution and efficiency.
The report warns that global shocks, including the Russia–Ukraine conflict and the 2026 Gulf crisis, have exposed vulnerabilities in Africa’s supply chains.
The continent continues to import over 70 percent of its refined fuel and faces an estimated $230 billion annual import bill for essential goods such as food, fertiliser, steel, and plastics.
In the digital sector, while connectivity has improved, the report points to gaps in core infrastructure—including fibre networks, data centres, and exchange points—needed to translate access into economic productivity.
Mr Zubairu said Africa’s next phase of growth will depend on building systems that connect capital with real economic activity.
“Africa is not capital-poor—it is capital-rich but system-poor,” he said. “The priority must be to build the institutions, instruments, and project pipelines required to deploy that capital effectively.”
