Africa should use more of its own capital to build its future

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 The frame is outdated.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