NAIROBI, Kenya – As global economic shifts reshape funding landscapes across the African continent, a landmark new analysis from the Africa Finance Corporation makes a clear case for reorienting development strategy around local capital, arguing that domestic financial pools must serve as the stable foundation for growth while foreign funding takes on a secondary complementary role. This framework comes as external financing to Africa has declined sharply in both total volume and consistency, creating an urgent need to unlock the continent’s own untapped financial resources.
The report was officially unveiled Thursday during the Africa We Build Summit, a high-profile gathering focused on shaping the next decade of the continent’s development trajectory. It offers a decade-long comparative analysis of capital flows between 2014 and 2024, finding that cumulative external financing into the region totaled approximately $1.7 trillion over that 10-year period. By comparison, the report values non-bank domestic capital pools across Africa at more than $2 trillion – a sum that already outpaces total incoming foreign investment and development assistance.
One of the report’s most striking findings is that Africa’s core development challenge has fundamentally shifted in recent years. Where previous decades were defined by struggles to attract enough total capital to fund large-scale projects, the contemporary barrier now lies in capital intermediation: the work of converting existing domestic savings into large, productive investments in critical infrastructure, growing industrial sectors, and job-creating enterprise. This shift reflects the rapid growth of domestic institutional capital that has already occurred across the region.
Data included in the analysis shows that domestic institutional capital has expanded dramatically in recent years, with combined pension and insurance assets crossing the $1 trillion threshold for the first time in the continent’s history. Additional figures break down the scope of existing domestic capital: public development bank assets across Africa total $276 billion, sovereign wealth funds hold $164 billion in assets, and central bank reserves grew from $480 billion in 2024 to $530 billion in the most recent reporting year.
Much of this recent growth in central bank reserves has been driven by stronger commodity market performance and a continent-wide push to increase gold holdings. Today, gold makes up roughly 17 percent of Africa’s total central bank reserves, up from less than 10 percent in the 2022–2023 period. Total physical gold holdings across African central banks rose from 663 metric tons in 2022 to an estimated 738 tons last year, according to the report.
Against this growth of domestic capital, external financing has become increasingly volatile and constrained. Official development assistance, a key source of public project funding for many low-income African nations, fell from $84 billion in 2020 to $74 billion in 2023, and projections point to further declines in coming years. The Organization for Economic Cooperation and Development confirms the broader downward trend, estimating that global development aid fell by 23 percent last year – the largest single-year contraction ever recorded.
The report’s conclusions frame the growth of domestic capital as a transformative opportunity for African nations to take greater ownership of their development agendas, reducing reliance on unpredictable global funding streams and aligning investments more closely with local development priorities.