Africa's Domestic Capital Reaches $2 Trillion Mark

According to a report by the Africa Finance Corporation (AFC), Africa's domestic capital has risen to $2 trillion, overtaking external financial flows, which totaled approximately $1.7 trillion from 2014 to 2024. This marks a significant turning point in the continent's financial landscape, emphasizing the importance of mobilizing domestic resources for industrial growth and infrastructure development.

The report, released during the Africa Build Summit in Nairobi, Kenya, indicates that while domestic non-bank capital pools have increased, challenges remain in channeling these funds effectively into viable projects. Samaila Zubairu, President and Chief Executive Officer of AFC, noted that the absence of effective systems to channel funds is a major constraint.

The report also highlights a concerning trend where a significant portion of domestic capital is concentrated in short-term, low-risk instruments, particularly government securities, leaving infrastructure investments underfunded. The decline in external financial flows and global aid further underscores the need for Africa to rely more on domestic capital for sustainable development.