Africa’s financial landscape in 2025 shows strong growth, yet infrastructure investment still lags behind expectations.
Institutional capital rose 25% and now exceeds $2 trillion across Africa in 2025.
As a result, stronger savings emerged, but infrastructure funding still falls short in many economies.
The Africa Finance Corporation (AFC) highlighted this gap in its latest report in Nairobi.
Rising Institutional Capital
African institutions increased total capital from about $1.6 trillion to over $2 trillion.
In addition, global market shifts and higher gold prices drove reserve gains across the continent.
Central banks also boosted asset values as gold prices strengthened throughout the year.
Meanwhile, pension and insurance funds now control over $1 trillion in capital holdings.
Public development banks manage around $275 billion across African financial systems.
Similarly, sovereign wealth funds hold $164 billion in accumulated institutional assets.
Central bank reserves contribute roughly $530 billion to Africa’s total financial base.
Weak Infrastructure Allocation
However, institutions still direct most capital away from infrastructure and industrial projects.
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Instead, they allocate large portions to low-risk government bonds for capital preservation.
Consequently, this approach protects wealth but restricts job creation and economic transformation.
AFC chief executive Samaila Zubairu stressed this growing disconnect between capital and development.
He said, “Capital is accumulating across Africa, but it is not creating jobs at scale.”
Therefore, he urged policymakers to improve capital allocation rather than simply increase supply.
Furthermore, the report highlights a mismatch between savings availability and development priorities.
Although risks remain high, many investors still prioritise safety over long-term investment returns.
Africa’s Financial Pressure And Reform Need
At the same time, global conditions now restrict Africa’s access to external financing.
For example, higher interest rates and geopolitical tensions tighten international credit markets.
Thus, African countries increasingly rely on domestic capital for development financing.
AFC, established in 2007, actively mobilises investment for infrastructure and industrial growth.
It operates under ownership from 48 African countries and key development partners.
Currently, the institution negotiates new infrastructure deals in Nairobi to close funding gaps.
Moreover, its upgraded ‘A’ credit rating from S&P Global reduces borrowing costs.
This improvement strengthens AFC’s ability to finance large infrastructure projects across Africa.
Ultimately, the report concludes Africa lacks deployment efficiency, not financial resources.
