Africa’s banking sector stays under-leveraged regardless of holding an estimated $2.5 trillion in complete belongings, limiting its capability to finance long-term improvement initiatives, based on the newest State of Africa’s Infrastructure (SAI) Report printed by the Africa Finance Company (AFC).
The 2025 report famous challenges throughout the sector, together with fragmentation and inadequate scale, which proceed to hinder efforts to shut the savings-investment hole and unlock the financing vital for large-scale infrastructure and industrial improvement throughout the continent.
AFC’s findings emphasize the pressing must strengthen African banks, positioning them as key gamers in mobilizing capital to assist structural transformation and {economic} development.
The report additionally highlights the necessary however underutilized position of public improvement banks and sovereign wealth funds in driving Africa’s {financial} priorities.
“Collectively managing some $400 billion, these establishments are sometimes underutilized resulting from fragmented mandates and weak alignment with nationwide improvement plans,” the report states.
Rising {financial} fashions, such because the increasing position of Caisses de Dépôts within the CFA franc zone, are being acknowledged as promising frameworks for mobilizing home financial savings by mission-driven {financial} intermediation, tailor-made to Africa’s particular {economic} realities.
Commenting on the report’s findings, Samaila Zubairu, President and CEO of AFC, outlined a roadmap for leveraging Africa’s {financial} energy to speed up industrial transformation.
“New AFC Analysis confirms that Africa already holds the sources to speed up this journey. We estimate the continent’s home capital swimming pools at over $4 trillion, together with greater than $1.6 trillion throughout the non-bank sector: $455 billion in pensions, $320 billion in insurance coverage, $250 billion in public improvement banks, $150 billion in sovereign wealth funds, and $473 billion in international reserves, together with $38 billion in gold holdings,” Zubairu said.
The most recent SAI Report gives a conservative estimate of over $1.1 trillion in long-term institutional capital from pensions, insurance coverage, sovereign wealth funds, and public improvement banks, together with $2.5 trillion in business banking belongings and over $470 billion in central {bank} reserves.
Since its inception, the AFC has contributed to Africa’s {financial} panorama, boasting 45 member nations and over $15 billion in investments throughout 36 African nations.
