AFC says Africa has $4 trillion local capital available to fund infrastructure
Building railways and expanding power generation are major priorities for the continent as its population and economies grow, but traditional sources of funding such as foreign direct investment and official development assistance are proving "increasingly insufficient", the AFC said.
Higher interest rates globally, declining donor budgets and protectionist policies in advanced economies are further tightening the availability of funds, it said in the report.
"These developments underscore Africa's need for a more resilient and internally anchored financing strategy," the financier, which is owned by African governments, multilateral lenders and private funds, said.
African governments are also struggling to find space within national budgets to pay for development projects as interest payments gobble up an ever-rising share, the report said.
They can however turn to the potentially trillions of dollars in domestic capital held by sovereign wealth funds, pension funds, and central and commercial banks, it added.
These are currently held by institutions or invested in short-term liquid instruments like money markets due to legal restrictions on where assets such as pension funds can be invested, it added in the report.
To unlock these funds, African governments will have to modernise huge swathes of their economies that are not taxed and regulated, and reform the rules around pension funds to allow them to invest in long-term infrastructure projects, AFC said.
They will also need to boost national savings rates, which on average stand at half those of Asian nations, it added.
The African Development Bank, a shareholder in AFC, has pegged Africa's annual financing gap for structural transformation at more than $400 billion, or nearly 14% of the continent's projected GDP by 2030.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
22 minutes ago
- Reuters
UK gives green light to Sizewell C nuclear plant
LONDON, July 22 (Reuters) - Britain has given the final go-ahead for the Sizewell C nuclear plant in eastern England, it said on Tuesday, announcing investment from Canadian pension fund La Caisse, UK energy firm Centrica, and Amber Infrastructure. The project is set to cost 38 billion pounds, the government statement said.
The Guardian
22 minutes ago
- The Guardian
UK strikes deal with private investors to build £38bn Sizewell C nuclear power plant
The UK government has struck a deal worth more than £38bn with private investors to back Britain's biggest nuclear project in a generation at the Sizewell C site on the Suffolk coast. The long-awaited multibillion-pound deal brings together investment from the UK government and Sizewell C's developer, the French energy group EDF, with a consortium of three other investors including the British Gas parent company Centrica. The UK government's stake in the project stood at 84% at the end of last year compared with EDF's 16% share of the project. Under the final deal, the government will remain the project's largest shareholder, with a 44.9% stake, while the French utility's share shrinks to 12.5%. Centrica will take a 15% share of the project while Canadian investment group La Caisse will hold 20%, and investment manager Amber Infrastructure will take an initial 7.6%. The final agreement marks the end of a 15-year journey to secure investment for the nuclear plant since Sizewell C was first earmarked for new nuclear development in 2010. It should deliver Britain's second nuclear power plant in a generation, capable of powering about 6m UK homes with low-carbon electricity, after EDF's Hinkley Point C nuclear plant, which is under construction in Somerset. Rachel Reeves, the chancellor, said the multibillion-pound investment was 'a powerful endorsement of the UK as the best place to do business and as a global hub for nuclear energy'. 'Delivering next generation, publicly owned clean power is vital to our energy security and growth, which is why we backed Sizewell C. This investment will create thousands of good quality jobs and boost the local economy as we deliver on our plan for change,' she said. Ed Miliband, the energy secretary, said last month that the project marked a 'golden age' for Britain's nuclear industry, which was crucial to 'get Britain off the fossil fuel rollercoaster' and meet the country's net zero targets. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The financial framework designed to support the project has angered anti-nuclear campaigners because it will grant EDF support via energy bills from the start of its construction. This means households could be on the hook for construction delays and cost overruns at Sizewell C, according to campaigners. The new framework differs from the model used to support the Hinkley Point C project, which will earn revenue for EDF only once the plant begins generating electricity in the early 2030s.
The Guardian
an hour ago
- The Guardian
AstraZeneca unveils $50bn US investment as pharma tariff threat looms
Update: Date: 2025-07-22T05:57:26.000Z Title: AstraZeneca's new US investment plans Content: Here's where AstraZeneca plans to spend its $50bn: Expansion of its R&D facility in Gaithersburg, Maryland State-of-the-art R&D centre in Kendall Square, Cambridge, Massachusetts Next-generation manufacturing facilities for cell therapy in Rockville, Maryland and Tarzana, California Continuous manufacturing expansion in Mount Vernon, Indiana Specialty manufacturing expansion in Coppell, Texas New sites to supply clinical trials Update: Date: 2025-07-22T05:56:04.000Z Title: Introduction: AstraZeneca unveils $50bn US investment Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. AstraZeneca has become the latest multinational company to announce a major investment in the US since Donald Trump began his trade wars. AstraZeneca announced last night it will invest $50bn in the US by 2030, building new manufacturing facilities and expanding existing sites. It says the plan – which has the seal of approval from the White House – will create tens of thousands of new, highly skilled direct and indirect jobs across America. It could also help AstraZeneca to reach a point where half its revenues are generated in the US. The plan includes building a new drug substance facility in the Commonwealth of Virginia, which will produce small molecules, peptides and oligonucleotides. That would be AstraZeneca's largest single manufacturing investment in the world. The move comes as the pharmaceuticals industry braces for Trump to impose new tariffs on their wares entering the US, possibly as soon as 1 August. Pascal Soriot, chief executive officer at AstraZeneca, says: 'Today's announcement underpins our belief in America's innovation in biopharmaceuticals and our commitment to the millions of patients who need our medicines in America and globally. It will also support our ambition to reach $80 billion in revenue by 2030.' This investment splurge also comes amid reports that Soriot has been considering shifting AstraZeneca's stock market listing from the UK to the US. AstraZeneca is currently the second most valuable company on the London stock exchange, shortly behind HSBC. Howard Lutnick, US Secretary of Commerce, has welcomed the plan, saying: 'For decades Americans have been reliant on foreign supply of key pharmaceutical products. President Trump and our nation's new tariff policies are focused on ending this structural weakness. We are proud that AstraZeneca has made the decision to bring substantial pharmaceutical production to our shores. This historic investment is bringing tens of thousands of jobs to the US and will ensure medicine sold in our country is produced right here.' 7am BST: UK public finances for June 10.15am BST: Bank of England governor Andrew Bailey to be grilled by Treasury committee MPs about financial deregulation 1.30pm BST: Fed chair Jerome Powell speech at the Integrated Review of the Capital Framework for Large Banks Conference, Washington, D.C. 2pm BST: Rachel Reeves to appear before Lords economics affairs committee
