Africa is sitting on a hidden reservoir of domestic capital worth over $165 billion that could drive its development but much of it remains “idling” in low‑yield pension funds, officials at the African Development Bank (AfDB) have warned.
Speaking at the Bank’s 2025 Annual Meetings in Abidjan, a high-level panel dissected ways to unlock this capital and steer it towards infrastructure, energy, agriculture, and private‑sector growth. Their stark message: Africa must shift away from dependency on foreign aid and volatile global markets if it is to build resilient economies.
The panel, moderated by Hassatou N’Sele, Vice President for Finance and Chief Financial Officer of the African Development Bank, formed part of key knowledge events at the Bank Group’s 2025 Annual Meetings
Abena Amoah, Managing Director of the Ghana Stock Exchange, shocked delegates when she revealed that pension funds in West Africa spanning Ghana and Nigeria hold nearly $40 billion, with over 90 percent invested in government securities. “They say they don’t have investment opportunities,” she told the session moderated by AfDB CFO Hassatou N’Sele.
“We have pension funds that just in West Africa, between Ghana and Nigeria, amount to almost $40 billion that is parking over 90% of their assets under management in government securities, saying they don’t have investment opportunities.”
Amoah revealed that in 2024, Africans invested $125 billion in cryptocurrency assets, with Nigeria alone contributing over $65 billion, making it the second-largest cryptocurrency investor base globally after India.
“Where did all that money go outside of the continent?” she challenged. “We talk about capital gaps” yet substantial resources are already within Africa’s financial ecosystem.
Denys Denya, Executive Vice‑President of Afreximbank, outlined how the institution had dramatically scaled up operations from $14 million in African institutional deposits in 2014 to over $34 billion today via its Central Bank Depository Programme. Afreximbank has also diversified funding sources by tapping into Japanese and Chinese markets, reducing reliance on Europe.
He said Afreximbank has revolutionized African capital mobilization through its Central Bank Depository Program, growing African institutional deposits from $14 million in 2014 to over $34 billion today.
“We have diversified our funding sources away from Euro markets, successfully raising capital in Japanese and Chinese markets this year,” Denya stated, emphasizing the institution’s strategic shift toward reducing dependency on traditional Western capital markets.
Even so, panelists acknowledged structural weaknesses: underdeveloped capital markets, macroeconomic instability, high interest rates, and policy bottlenecks that hinder women and young entrepreneurs from accessing funding.
Razia Khan, head of research, Africa and Middle East at Standard Chartered Bank, emphasized the critical need to address macroeconomic instability, volatile interest rates exceeding 20 percent in some markets, and regulatory bottlenecks that systematically exclude women and youth entrepreneurs from accessing capital.
Chika Mordi, Chairman of United Capital, underlined the dilemma: government borrowing rates of 18–20 percent drive rational institutions toward low-risk government securities, not riskier private-sector projects. He advocated for “stable macroeconomic environments, innovative profit‑sharing mechanisms, and risk‑mitigation instruments” to unlock long-term finance.
“We need stable macroeconomic environments, innovative profit-sharing mechanisms, and comprehensive risk mitigation instruments to unlock long-term capital for Africa’s transformation,” Mordi stressed.
Ibrahima Diouf, Special Advisor at the West African Development Bank (BOAD), called for immediate cultural and policy shifts: “We need our diaspora investing in Africa, but they can’t do it if we ourselves are investing outside. This cultural transformation must happen now Africa is where we need to invest.”.
S&P Global President Yann Le Pallec added that Africa is projected to grow at 4.8 percent GDP in 2025, significantly above the global average of 3 percent evidence of substantial growth potential despite infrastructure and financial constraints. He said Africa’s rapid rebound from COVID‑impacted economies, especially in energy transition, makes it “at the core of real economic development.”
Admassu Tadesse of Trade & Development Bank underscored innovation in investment vehicles targeted at African institutional investors. “What started as an experiment has exceeded expectations,” he revealed, noting growth in JPMorgan’s regional footprint and continued involvement from global banks like Standard Chartered.
He also warned, however, that inadequate treatment of trade finance in Africa’s debt restructuring efforts, along with compliance burdens, still disincentivises correspondent banking in several economies.
A common diagnosis emerged: Africa is not short on capital, it’s short on mechanisms to channel it. The experts pushed for:
Deepening capital markets to absorb pension and retail savings.
Macro‑stability to reduce lending costs.
Innovative financial tools (e.g., risk‑mitigation, profit‑sharing).
Policy reform to expand inclusion for women and youth.
Encouraging diaspora participation.
Enhanced trade‑finance frameworks.
Do you have any story or press releases you want to share? Send tips to editor@envestreetfinancial.com
Follow us on Twitter, Facebook, or LinkedIn to ensure you don’t miss out on any