Africa holds an estimated $4 trillion in domestic capital, yet limited financial intermediation and fragmented capital markets continue to impede infrastructure development. The latest State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation (AFC) finds that weak institutional coordination and shallow markets prevent effective mobilisation of domestic savings — even as external financing sources such as foreign aid and sovereign borrowing become increasingly volatile.
According to the report, more than $1.6 trillion of Africa’s domestic capital is concentrated in non-bank sectors, including pensions, insurance, development banks, sovereign wealth funds, and reserves. However, low pension coverage, weak insurance penetration, and limited long-term instruments constrain liquidity and investment depth. Regulatory harmonisation and cross-border market integration are highlighted as critical reforms to unlock this capital.
The report concludes that Africa must prioritise domestic resource mobilisation, using internal wealth as the foundation for sustainable growth while aligning external financing with long-term development objectives.
