The Africa Finance Corporation (AFC) is ramping up efforts to mobilize domestic capital for investment in Africa, while also courting investors from the Middle East and Asia. With Western nations shifting their financial priorities, the AFC aims to secure long-term funding from African pension funds and institutional investors to fuel economic growth.
Mobilizing Domestic Capital
Samaila Zubairu, CEO of the AFC—a development finance institution backed by Nigeria’s central bank and other African financial bodies—stressed the urgency of channeling local capital into infrastructure and development projects.
“We want to make domestic capital more readily available for investment within the continent,” Zubairu said in an interview. He noted that African pension funds could provide between $15 billion and $20 billion for long-term investments.
As Western aid shrinks under policies like U.S. President Donald Trump’s “America First” agenda and Europe’s redirected spending toward defense, Africa faces a pressing need to tap into its own financial resources. However, the continent’s low savings rates and underdeveloped financial markets have long hindered such efforts.
Scaling Up Investments
The AFC, which deploys $2.5 billion to $3 billion annually, is looking to increase fund allocation by backing projects that attract further investment. One such initiative is InfraCredit, designed to support pension fund investments in infrastructure. Backed by Nigeria’s sovereign wealth fund, the program has raised 230 billion naira ($152 million), including contributions from 21 pension funds that previously invested predominantly in government debt.
Zubairu revealed that similar initiatives are planned for Botswana, Angola, and Kenya as early as this year. “If we scale up programs like this, billions more could be unlocked for investment,” he said.
Additionally, pension funds are contributing to the Infrastructure Climate Resilience Fund, leveraging a $52 million commitment from the European Investment Bank. Gulf and European investors are also exploring AFC-backed projects, including ARISE Integrated Industrial Platforms, which develops and finances industrial projects.
Strategic Reserves and Future Expansion
With uncertainty over U.S. investment in the Lobito Corridor—a railway linking the Democratic Republic of Congo with Zambia and Angola’s Lobito port—Zubairu remained confident in the project’s viability. While former U.S. President Joe Biden visited the site in December, Trump has yet to signal his administration’s stance. Nevertheless, Zubairu maintained that the corridor’s strong financial framework ensures progress regardless of U.S. involvement.
Looking ahead, he urged African nations to rethink their approach to financial reserves. “Instead of just measuring reserves in months of import cover, we should focus on how they can be leveraged for investment and economic growth,” he said.
The AFC is also eyeing new bond issuances in the Middle East and China, following its first sukuk issuance last month. With recent AAA credit ratings from S&P Global (China) Ratings and China Chengxin International Credit Rating Co., the institution is expanding Africa’s access to diverse funding sources.
“We’re broadening Africa’s financing options,” Zubairu said, underscoring the AFC’s push to reshape the continent’s investment landscape.