Ramaphosa and Dangote Debate Africa's Power Financing

In a panel discussion focused on Africa's infrastructure financing challenges, South African President Cyril Ramaphosa asserted that the continent should not rely solely on foreign capital for major projects. He cited South Africa's experience, emphasizing that domestic financial markets have effectively financed renewable energy projects.

Ramaphosa argued that projects with clear revenue streams, credible structures, and manageable risks can attract funding from local banks and investors. In contrast, billionaire businessman Aliko Dangote presented a differing viewpoint, stating that the mere availability of funds in African banks does not equate to affordability for businesses.

He pointed out that high interest rates pose a significant constraint, particularly for capital-intensive projects like power generation. Dangote explained that elevated financing costs necessitate much higher returns for businesses to make projects viable, which can ultimately lead to increased infrastructure costs and deter investment in projects requiring substantial upfront capital and extended timelines for returns.