Africa holds the financial capacity to drive its own infrastructure transformation, with over $4 trillion in investable domestic capital available on the continent. This is the central finding of the 2025 State of Africa’s Infrastructure (SAI) Report, released by the Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider.
The report strongly advocates for a shift away from over-reliance on foreign financing and towards leveraging Africa’s own substantial financial resources.
AFC CEO Samaila Zubairu emphasized, “Financing this infrastructure transformation must begin with African capital. The future of African infrastructure depends on African finance.” He highlighted the immense, yet largely untapped, potential in long-term domestic capital pools such as pension funds, insurance pools, sovereign wealth funds, and diaspora remittances.
According to the AFC’s comprehensive research, of the estimated $4 trillion in domestic resources, approximately $1.6 trillion resides in the non-bank sector. This includes substantial amounts in pension funds, insurance assets, public development banks, sovereign wealth funds, and foreign reserves.
Additionally, the banking sector holds roughly $2.5 trillion in commercial banking assets, which the AFC describes as significantly underutilized for long-term infrastructure development.
Despite this vast pool of capital, the report points out that much of it is currently locked in low-risk, short-term instruments, often invested outside the continent, rather than being channeled into productive sectors within Africa.
This misallocation is partly due to restrictive regulations on how institutional funds, particularly pension funds, can be invested. South Africa alone accounts for 70% of the continent’s pension assets, with resources heavily underutilized elsewhere.
The AFC’s report provides a practical roadmap for unlocking these funds, urging critical reforms such as expanding eligible asset classes for institutional investors, revising statutory investment limits to reduce overconcentration in government securities, and raising ceilings for private sector and alternative investments.
It also calls for incentivizing long-term lending by policymakers, strengthening financial institutions, and developing more integrated regional capital markets. Furthermore, adopting labor market formalization strategies and financial inclusion initiatives is crucial to connect informal financial activity with formal investment channels.
The report highlights that the energy sector, in particular, is in dire need of capital. Per capita electricity consumption is in decline despite rising GDP and population growth, with Sub-Saharan Africa accounting for over 83% of the global population lacking access to electricity since 2022. The AFC argues that Africa’s energy systems must evolve to become engines of structural transformation, enabling the growth of manufacturing, minerals processing, data centers, and other energy-intensive sectors.
While challenges persist, there are positive signs. The report notes a resurgence in rail infrastructure, with over 7,000 km of under-construction and planned railway lines, indicating a potential doubling of rail development pace in the next decade.
Nigeria, for instance, has seen its pension exposure to infrastructure grow from less than 0.02% to 1% of total assets since 2017, driven by reforms and credit enhancement mechanisms.
The AFC’s 2025 State of Africa’s Infrastructure Report serves as a potent call to action, affirming that the capital for Africa’s transformation is already within its borders. The imperative now is for coordinated action among governments, financial institutions, and policymakers to unlock this financial strength and channel it strategically into the infrastructure needed for an industrialized, connected, and resilient continent.
