Africa Finance Corporation’s (AFC) has reported that Africa’s institutional capital pool grew by 25% to over $2 trillion in 2025, despite the continent’s challenges in financing critical infrastructure projects needed to boost its Gross Domestic Product (GDP).
The Corporation gave these figures in its latest “State of Africa’s Infrastructure Report” released in Nairobi, Kenya, which reflected a growing disconnect between rising capital reserves and the continent’s ability to channel funds into productive investments that drive job creation.
According to data from the report, the increase in capital held by African institutions is partly driven by global market dynamics, particularly rising gold prices which were under-utilised in infrastructure financing.
The AFC clarified: “Total institutional capital pools in Africa exceeded $2 trillion, up from over $1.6 trillion recorded a year earlier.
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“An update of our database shows institutional capital pools now exceed US$2 trillion, including over US$1 trillion in pension and insurance assets, approximately US$275 billion in public development banks, US$164 billion in sovereign wealth funds, and US$530 billion in central bank reserves – supported.
“The growth in reserves was partly driven by higher gold prices, which boosted the value of central bank holdings.
“Across the continent, there is growing consensus on the role of domestic savings in financing development”, it added.
Despite the impressive performance, the Corporation noted that the acquired capital was not being effectively deployed into infrastructure and industrial development by the national governments with the attendant implications for under-performance of the various economies.
Noting that the core issue of the governments lies in how capital is allocated rather than its availability, the AFC flawed their investment strategies which it described as overly conservative.
Commenting on the report’s findings, President/Chief Executive of the AFC, Samaila Zubairu, said that capital was accumulating across Africa, but had not been creating jobs at a large scale, stressing “that is the disconnect we must fix.”
A further analysis of the report’s findings reflected that funds were largely invested in low-risk assets such as government bonds but that this approach had been hampering the flow of capital into productive sectors like infrastructure and manufacturing.
The AFC described this as a “failure of alignment” between capital availability and development needs that the African leaders must fix in order to improve the performances of their economies and position the countries for global competitiveness.
