Africa’s development debate is too often framed as a search for money from elsewhere. The frame is outdated.
The continent commands vast pools of capital, yet too much of the money remains invested abroad while Africa struggles to finance the infrastructure and industrial transformation it urgently needs.
That argument is no longer confined to academics or financiers. At the Presidential Dialogue on African Union Financial Institutions held on the margins of the 37th Ordinary Session of the Assembly of Heads of State and Government in Addis Ababa, former Ghanaian president Nana Addo Dankwa Akufo-Addo proposed redirecting 30% of African sovereign reserves, held in foreign banks, to African institutions such as the African Development Bank and Afreximbank.
It was a provocative suggestion and a revealing one: it captured a broader frustration that African capital continues to do too little for Africa.
The numbers make the case harder to dismiss. Africa’s central bank reserves rose to about $530 billion in 2025, up from roughly $480bn in 2024. More importantly, the continent’s non-bank domestic capital pools exceed $2 trillion, surpassing the roughly $1.7 trillion in cumulative external flows recorded between 2014 and 2024.
Africa is not short of capital in absolute terms. It is short of mechanisms to deploy that capital productively and at scale. The paradox is stark: African savings are parked in low-yield foreign assets, while African governments and firms return to international markets to borrow at far higher costs. In effect, the continent lends cheaply to the rest of the world and borrows back expensively to finance its own development.
The same contradiction runs through long-term institutional savings. Africa’s pension and insurance assets have crossed $1 trillion. Yet much of the money remains concentrated in low-risk instruments, including government securities and offshore placements, rather than channelled into long-term productive investment. Part of this is regulatory. Part of it is prudence. Fund managers operating in shallow markets and uncertain governance environments are behaving rationally.
Why is African capital not working harder for Africa?
A large part of the answer lies in risk. Data quality matters. Policy credibility matters. Politics matters. Where investors and fiduciary institutions cannot form a reliable view of risk — because data are weak, regulation is inconsistent or political interference is too visible — capital will move abroad. That is not irrational. It is the predictable consequence of uncertainty.
If African countries want more of their own savings to remain on the continent, they must reduce the uncertainty premium that keeps pushing capital outward.
The second problem is intermediation. Africa does not need only capital; it needs stronger channels through which savings can be converted into productive investment. Whether through continental financial institutions or deeper domestic capital markets, the machinery remains underdeveloped.
Better regulation, stronger oversight, more harmonised rules and better-connected markets would make it easier to turn African savings into infrastructure, industry and long-term development finance.
This is why governance is not a side issue but the heart of the financing question. Africa will not mobilise its own capital at scale without credible rules, institutional independence and effective supervision. Infrastructure and structural transformation require time horizons that extend well beyond electoral cycles. Investors and fiduciary managers must be able to see a stable horizon, not one clouded by arbitrary intervention, opaque decision-making or shifting political priorities.
What, then, should be done? The emerging African Credit Rating Agency is a major step, though not a sufficient one. A credible African-owned ratings institution could help correct persistent distortions in how African risk is priced and understood. But credibility will be everything. If it is to win the confidence of central banks, pension funds and global investors, it will need methodological rigour, transparency and genuine institutional independence.
Stronger intermediation through continental institutions also matters. Afreximbank’s Central Bank Deposit Programme, launched in 2014, was designed to mobilise a share of African foreign-exchange reserves and recycle them into African trade and development finance. It is a serious institutional innovation — and proof that the idea of putting African savings to work for African priorities is not merely rhetorical.
The case for directing more capital through the African Development Bank is equally strong. But the agenda cannot end with two institutions. Africa also needs deeper stock exchanges and bond markets and better links between them, so that domestic capital can move more efficiently, transparently and across borders.
None of this will work if sovereign reserves and pension assets are steered by short-term politics. Strong laws, independent enforcement and credible safeguards are essential. Central banks and pension fund managers have fiduciary duties; they cannot be asked to substitute patriotism for prudence. Where governance is weak, they will continue to prefer foreign placements. That is not a failure of commitment. It is a rational response to institutional risk.
Africa has more capital than the old development narrative allows. The real challenge is not whether the money exists but whether institutions are strong enough to keep more of it at home and deploy it well. That means reducing political interference in finance, improving risk assessment, strengthening governance and building the channels that can turn savings into investment at scale.
If African countries did that, the continent would no longer need to ask first what the world can finance for Africa. It will be able to ask what Africa is prepared to finance for itself.
Anthony Ohemeng-Boamah is an expert on African development and socio-economic transformation.
But the continent will not be able to do this at scale without having credible rules, institutional independence and effective supervision in place
