African Development Bank pushes to unlock African capital

African financial leaders called for changes to the continent’s financing system during talks in Abidjan, RFI reported on 24 April, as African institutions push to unlock investment held back by fragmented capital markets and weak financial coordination.

Speaking at the opening of the discussions, African Development Bank president Sidi Ould Tah said Africa’s financial architecture was no longer suited to the continent’s development needs.

He said the issue was not a shortage of money, but the difficulty of directing African capital towards infrastructure, energy and business investment.

African countries continue to face large financing gaps while domestic savings remain difficult to channel into long-term projects. Pension funds, insurers and other institutional investors are often reluctant to invest because of limited guarantees and concerns over risk.

Participants at the meeting adopted an eleven-point framework known as the “Abidjan Consensus”, part of what officials described as a push for a new African financial architecture aimed at mobilising more domestic capital.

The plan focuses on restructuring how investment and financial risk are managed, with supporters arguing that stronger cooperation between institutions could reduce dependence on external funding and limit exposure to global financial shocks.

Economist Carlos Lopes said African financial institutions should operate more closely together rather than functioning in isolation.

Officials at the talks also highlighted the limited role of guarantee funds, which help reduce lending risks for banks and investors. Participants said the lack of guarantees continued to restrict financing for sectors including rural entrepreneurship and small businesses.

Former Beninese prime minister Lionel Zinsou said African economies remained vulnerable to inflation and higher interest rates abroad because many countries still relied heavily on external financing.

Participants also identified a shortage of viable investment projects as a major obstacle, with discussions focusing on improving project preparation and creating tools to connect investors with opportunities across the continent.

RFI, African Development Bank Group, Maghrebi.org