Africa possesses a vast pool of over $4 trillion in untapped domestic capital that could be key to closing its widening infrastructure gap, according to the Africa Finance Corporation (AFC).
In its 2025 State of Africa’s Infrastructure report, the AFC highlights that pension funds, sovereign wealth funds, commercial banks, and central bank reserves collectively hold more than enough resources to drive the continent’s industrial transformation. But, the majority of this capital remains tied up in low-risk, short-term instruments due to legal, regulatory, and structural barriers.
The report identifies more than $1.1 trillion in long-term institutional capital, including $455 billion in pension funds and $150 billion in sovereign wealth funds. Commercial banks add another $2.5 trillion in assets, while central banks control over $470 billion in reserves. However, little of this wealth is being invested in infrastructure, energy, or other productive sectors.
AFC CEO Samaila Zubairu emphasised the urgency of policy reform to unlock this capital. He called for a shift from external dependence to internally anchored financial strategies. This includes updating pension fund regulations, modernising informal economies, and creating investment-grade instruments.
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Energy remains Africa’s most pressing development need. The continent must add 16GW of grid-connected power annually until 2050, yet only 6.5GW was added in 2024. Electricity generation growth, currently below 2%, is not keeping pace with population and industrial demand.
The report also stresses the potential of renewable energy, including hydropower, solar, and geothermal, as well as the need for integrated energy and digital infrastructure planning.
Beyond power, sectors like rail and industrial manufacturing also offer significant opportunities. With over 7,000km of new rail planned and massive imports of steel, fertilizer, and refined fuels, the AFC urges local production using domestic resources.
