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Africa’s infrastructure deficit has been discussed for years, but the latest discussions at the 2025 Africa Investment Forum Market Days make one thing clear: the gap is widening faster than expected.
Senior policymakers and industry leaders warned that the continent needs $150 billion annually to meet its core infrastructure needs. Yet African countries currently invest only half of that amount.
This shortfall does more than slow development. It shapes competitiveness, productivity, and economic resilience at a time when Africa’s population is rising rapidly, and climate pressures are intensifying.
We now unpack the reality behind the numbers, the risks of inaction, and where new opportunities for financing and reform could unlock long-term growth.
Africa’s current annual infrastructure investment stands at around $80–90 billion, according to the Infrastructure Consortium for Africa (ICA).
This leaves a financing gap of $60–70 billion every year. The scale of the gap is not just a funding problem; it reflects the breadth of the continent’s unmet infrastructure needs.
The deficits cut across sectors:
Energy: Over 600 million people still lack access.
Transport: High logistics costs increase the price of African goods by up to 40%, hurting trade competitiveness.
Digital access: Universal broadband coverage by 2030 would require more than $100 billion in investment.
Water and sanitation: Millions lack access to safe drinking water and basic sanitation services.
These constraints weaken business productivity, limit job creation, and discourage industrialization.
In many economies, the lack of infrastructure has become the largest barrier to private-sector investment.
At the forum, Boston Consulting Group’s Zineb Sqalli pointed to a demographic reality that sits at the heart of this challenge: Africa will add one billion people by 2050, and more than half will live in cities.
This shift will reshape the continent’s economic landscape.
Urban centers will need:
Affordable housing
Efficient transport systems
Reliable power
Waste management and sanitation
Digital connectivity
Social services for millions of young people entering the workforce
Without scaled-up investment, urbanization risks increasing congestion, insecurity, and unemployment.
UN-Habitat estimates that African cities require upwards of $25–30 billion annually to build the infrastructure needed for sustainable urban growth.
The gap between what is needed and what is currently available continues to widen every year.
Beyond traditional infrastructure needs, Africa faces a climate-finance gap that is far more severe.
Experts at the forum noted that the continent requires about $300 billion annually to address climate adaptation and mitigation, but receives only $30 billion — just 10% of the required amount.
This shortfall has direct economic consequences:
Extreme weather events already cost African economies $7–15 billion each year.
Agricultural yields — the backbone of many African economies — could decline by up to 15% by 2050.
Rising food import bills are expected to reach $110 billion by 2025.
For many African countries, climate finance is now not just an environmental issue, it is an economic survival issue.
One of the strongest messages from the forum came from Dr. Obaid Saif Hamad Al-Zaabi, who argued that food-security value chains should be treated as a strategic asset class.
This perspective is backed by hard realities.
Around 70% of Africa’s food is produced by smallholder farmers.
Yet these farmers receive less than 3% of commercial lending.
Infrastructure challenges, including poor roads and inadequate, storage contribute to post-harvest losses as high as 30–40% in some regions.
Africa has the potential to become a global food supplier, as the continent holds 60% of the world’s uncultivated arable land.
However, without targeted investment and better financing structures, this potential remains untapped.
Dr. Al-Zaabi called for expanded guarantees and specialized financing vehicles that can support farmers, strengthen agro-processing, and build resilient value chains.
While financing gaps remain large, another challenge has received growing attention: the shortage of bankable projects.
Amadou Hott, former Senegalese economy minister, noted that Africa needs to multiply current project-preparation efforts “by 100 or even 150” to meet demand. This bottleneck occurs long before financing is even mobilized.
Projects struggle because:
Feasibility studies are inadequate or incomplete.
Regulatory frameworks are unclear or inconsistent.
Governments lack technical capacity for project structuring.
Risk levels are perceived as high by investors.
According to the African Development Bank, less than 10% of planned infrastructure projects in Africa reach financial close.
Building a strong pipeline of well-prepared, investment-ready projects is one of the continent’s most urgent priorities.
Africa often looks outward for infrastructure financing, but the continent holds significant capital internally that remains underutilized.
Potential domestic sources include:
Pension funds (over $350 billion in assets)
Sovereign wealth funds
Insurance reserves
National development banks
If just 5% of African pension assets were allocated to infrastructure, it would release over $17 billion annually — enough to finance major energy, transport, and water projects.
However, greater domestic participation requires:
Safe investment frameworks
Clear regulatory guidance
High standards of project governance
Attractive risk-return profiles
Unlocking domestic capital is one of Africa’s strongest pathways to long-term, sustainable infrastructure investment.
Another striking observation from forum speakers came from Dr. Nasser Al-Kahtani, who noted that small farmers “save the world, but cannot feed themselves.”
The struggles they face are well known:
Limited access to credit
High vulnerability to climate shocks
Lack of mechanization
Inadequate storage and processing capacity
High transport and input costs
Blended finance — combining public, private, and philanthropic capital — offers a practical solution for de-risking investments in agriculture and enabling farmers to participate meaningfully in regional and global markets.
Africa’s diaspora sent home $95 billion in 2023, surpassing both foreign direct investment and official development assistance. This pool of capital represents a major opportunity for infrastructure financing.
Emerging tools include:
Diaspora bonds
Remittance-backed infrastructure financing
Infrastructure SPVs
Co-investment platforms
With appropriate governance, transparency, and risk management, diaspora-backed investment can play a bigger role in financing long-term infrastructure.
Africa’s $150 billion annual infrastructure gap is daunting, but it also represents one of the biggest investment opportunities of the next generation.
If the continent can address its project-preparation weaknesses, mobilize domestic and diaspora capital, and modernize its legal frameworks, it could unlock new levels of growth.
Bridging the gap would:
Accelerate industrialization
Boost the competitiveness of the AfCFTA
Strengthen food systems
Create millions of jobs
Improve resilience to climate shocks
Madica, an African-focused investment program targeting early-stage startups, revealed its inaugural investments in three promising companies: Kola Market (Ghana), GoBEBA (Kenya), and NewForm Foods (South Africa).
BURN Manufacturing (BURN), a leading clean cookstove manufacturer, distributor, and carbon-offset project developer, has announced the issuance of Sub-Saharan Africa’s first-ever green bond designated for clean cooking financing of USD $10 Million.
The Emerging Africa & Asia Infrastructure Fund (EAAIF), under the management of Ninety One, has committed $45 million in funding to CrossBoundary Energy.
