By Ayomide Otitoju
Senior policymakers, investors, and development finance executives gathered on Thursday at the 2025 Africa Investment Forum (AIF) Market Days to address one of the continent’s most urgent challenges: mobilising the capital needed to meet fast-growing infrastructure and climate demands.
At a high-level panel titled “Innovative Finance Instruments Powering Africa’s Sustainable Transformation,” speakers underscored the need for African governments and partners to move beyond traditional funding models and embrace new investment tools capable of driving large-scale development.
Moderated by Zineb Sqalli, Partner and Managing Director at Boston Consulting Group, the session opened with a sobering reality check. By 2050, Africa’s population will grow by one billion—more than half in cities—yet the continent invests just $75 billion of the $150 billion required annually for infrastructure. The climate-finance deficit is even wider, with Africa receiving only $30 billion of the $300 billion needed each year.
“This gap is massive, but it is also a great opportunity,” Sqalli said, citing strong momentum in blended-finance products, Islamic green bonds, diaspora-funded vehicles, and new infrastructure platforms.
Setting the tone for bold action, Dr. Obaid Saif Hamad Al-Zaabi, Chairman of the Arab Authority for Agricultural Investment and Development, urged a complete rethinking of how food systems are financed. With climate pressures intensifying, he called for treating the food-security value chain as a strategic asset class.
“Climate change is no longer an environmental issue—it is a financial risk on our balance sheets,” he said, advocating for expanded guarantee mechanisms, sustainable-finance tools, specialised vehicles for smallholder farmers, and stronger digitalisation to reduce information gaps.
On investment readiness, Amadou Hott, Chairman of the Africa Advisory Board of Vision Invest and former Senegalese Minister of Economy, identified the shortage of bankable projects as Africa’s most pressing bottleneck.
“If we want to transform the continent, we need to multiply what we are doing today by 100 or even 150,” he said. Hott called for enhanced project-preparation capacity and urged African governments to deploy more domestic capital—sovereign wealth funds, pension assets, and foreign reserves—much of which remains invested offshore. He also flagged currency risk as a major deterrent for investors.
Dr. Nasser Al-Kahtani, Executive Director of the Arab Gulf Programme for Development, stressed the importance of inclusive finance, noting that smallholder farmers produce 70% of Africa’s food yet struggle to sustain themselves. He pushed for blended-finance structures that shift economies “from grants to investment” while building equity for micro-entrepreneurs.
Offering a private-sector perspective, Jacques Kanga, Director and Head of Finance at Algest Investment Bank, outlined targeted tools that could unlock private capital and close Africa’s annual $130 billion to $170 billion infrastructure gap. These include infrastructure SPVs to mitigate sovereign risk, blended-finance mechanisms to lower project costs, and diaspora-backed vehicles tapping into the $95 billion sent home annually by Africans abroad. Such instruments, he said, can strengthen transparency, governance, and investor confidence.
Ouns Lemseffer, Partner at Ashurst, highlighted progress across several African markets, where governments have introduced advanced securitisation and sustainable-finance frameworks enabling project bonds, Sukuk, debt funds, and innovative electrification financing such as Côte d’Ivoire’s Programme Électricité Pour Tous. However, she warned that reforms remain uneven and urged policymakers to adopt comprehensive legal frameworks—from investor protections to bankruptcy laws—to fully open capital markets to long-term infrastructure investment.
Closing the session, panelists delivered a unified message: innovative financing is no longer optional but essential for Africa’s future. They agreed that new financial instruments must play a central role in mobilising the scale of capital required to meet the continent’s demographic, climate, and development ambitions—and to transform promising opportunities into bankable, impactful projects across Africa.
