Africa’s financial institutions hold substantial resources, yet businesses and infrastructure projects across the continent continue to struggle to secure affordable, long-term financing.
This contradiction was central to discussions at the Africa Financial Summit (AFIS) 2026, held in Luanda, Angola, on 3–4 November. Under the theme “Making Capital Count: Accelerating Growth Through African Finance”, the summit brought together financial leaders, investors, regulators and policymakers to examine how African savings can better support the continent’s productive economy.
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The African Development Bank Group (AfDB) estimates that Africa faces an annual development financing gap exceeding $400 billion, while domestic capital pools collectively exceed $4 trillion. These resources include commercial banking assets, pension and insurance funds, sovereign wealth funds, central bank reserves, public development banks and other domestic financial holdings. The challenge, therefore, is not simply to accumulate more capital, but to improve how existing resources are mobilised, structured and deployed.
This is the rationale behind the AfDB’s New African Financial Architecture for Development (NAFAD), which seeks to strengthen coordination across Africa’s financial institutions, improve risk allocation and expand the use of guarantees, insurance and blended finance. Its objective is to connect available capital with viable projects that can generate economic and social returns.
A significant obstacle is the limited availability of investment-ready projects. Infrastructure proposals may address urgent national needs but still struggle to attract institutional investors because of weak project preparation, uncertain revenue models, regulatory inconsistencies and inadequate risk assessments. Pension funds and insurance companies, for example, have fiduciary responsibilities that require them to protect beneficiaries’ capital. They cannot simply direct savings towards projects because those projects are strategically important.
The distinction between available capital and investable opportunities is therefore critical. Guarantees and risk-sharing arrangements can help reduce exposure for private investors, but they cannot make an economically unviable project commercially sound. Strong project preparation, transparent procurement, credible feasibility studies and predictable regulation remain essential.
Tanzania’s Julius Nyerere Hydropower Project illustrates both the potential and the financial considerations involved in mobilising domestic resources. Officially inaugurated on 22 August 2026, the $2.9 billion project has an installed generation capacity of 2,115 megawatts, supplied by nine turbines of 235 megawatts each. Constructed by Egypt’s Arab Contractors and Elsewedy Electric, it represents a major investment in Tanzania’s electricity infrastructure.
According to Tanzania Electric Supply Company, the plant accounted for 44.9% of electricity generated and supplied to the national grid in the year ending 31 May 2026. Its contribution demonstrates how large-scale infrastructure can strengthen energy supply and support industrial and economic activity.
The project was financed through substantial government resources, reducing reliance on external project lenders. However, this approach also placed considerable demands on public finances and concentrated financing and delivery risks within the country. It should not be interpreted as proof that government-funded infrastructure is always preferable to external or blended financing. Rather, it demonstrates the importance of matching financing structures to project costs, national fiscal capacity and expected public benefits.
Risk-sharing mechanisms were another important focus of the summit. In June 2026, the AfDB announced approval of a $125 million equity investment in the African Trade and Investment Development Insurance (ATIDI). The investment is intended to strengthen ATIDI’s capital base and expand its political-risk and credit-insurance products. The transaction is expected to increase the Bank’s shareholding from 3% to 14%, making it ATIDI’s largest shareholder.
This is significant because political and commercial risks can discourage investment in markets where investors face uncertainty over payment, regulation, currency movements or contract enforcement. Stronger African risk-insurance institutions could help make viable projects more attractive to international and domestic investors, while supporting intra-African trade and investment.
The summit also highlighted the need to strengthen domestic capital markets and expand access to long-term, local-currency financing. Many African businesses struggle with currency mismatches when they borrow in foreign currencies but generate revenue in local currencies. Exchange-rate depreciation can increase repayment costs and weaken otherwise viable investments. Deepening local bond markets, improving financial regulation and expanding suitable equity instruments could help address these constraints.
Another structural issue is the limited capacity of African insurance and reinsurance markets to retain certain categories of risk. AFIS discussions highlighted that approximately 70–90% of premiums associated with specialised risks can flow to non-African reinsurers. This figure relates to specialised risk coverage, not the entire African insurance market. Nevertheless, it illustrates the opportunity to strengthen local underwriting expertise, capitalisation and regional risk-pooling arrangements so that more insurance capacity and expertise remain within the continent.
Importantly, NAFAD is beginning to move beyond policy discussions. At AFIS, the AfDB highlighted its Pan-African Guarantee Platform as an operational component of the initiative. The platform is intended to coordinate guarantee capacity across participating institutions and help mobilise investment by reducing risks that individual investors may be unable or unwilling to assume alone.
For these mechanisms to deliver lasting benefits, transparency and accountability must remain central. Governments and project sponsors need to disclose financing terms, procurement arrangements, guarantees and potential public liabilities. Independent technical, financial and environmental assessments should inform investment decisions, while pension and insurance funds must retain the freedom to invest in line with their fiduciary obligations.
Africa’s domestic capital should not be treated as an unrestricted pool waiting to be redirected into infrastructure. It belongs to depositors, pension contributors, policyholders and other beneficiaries whose interests must be protected. The objective is to create credible investment opportunities that offer appropriate returns while supporting wider economic development.
AFIS 2026 placed an important responsibility before African financial leaders: to turn the continent’s financial strength into productive economic capacity. The Julius Nyerere project demonstrates the scale of what national resource mobilisation can achieve, while the development of ATIDI and NAFAD points to the importance of institutions that can distribute risk and attract additional investment.
Ultimately, Africa’s financial independence will depend not only on how much capital it holds, but on the strength of the institutions, markets and projects through which that capital is deployed. Mobilising domestic resources for shared prosperity requires a financial architecture that protects savers, supports businesses and finances infrastructure capable of delivering measurable value.
