AfDB Leads Drive to Build New African Financial Architecture for Growth

Opening the session, Dr Ould Tah addressed the heads of African securities exchanges, private equity leaders, and venture capital representatives.

The African Development Bank Group (AfDB) has opened a landmark series of high-level meetings with Africa’s major financial institutions, capital market leaders, and private sector investment partners. The goal: to design a bold, historic blueprint for a New African Financial Architecture capable of tackling the continent’s deepening development finance gap and mobilising large-scale resources for sustainable growth.

The two-day consultations, held at the AfDB headquarters in Abidjan, bring together more than 50 leaders from African stock exchanges, venture capital firms, private equity funds, pension administrators, DFIs, and regulatory bodies. The meetings mark the first time the AfDB has convened all major players in African capital markets under one coordinated platform.

AfDB President Dr Sidi Ould Tah, who assumed office in September 2024, described the gathering as “vital to the continent’s destiny”, stressing that Africa must take control of its financial future through structural reforms, deeper integration, and an overhaul of capital mobilisation mechanisms.

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“You Are the Architects of Africa’s Future” — AfDB President

Opening the session, Dr Ould Tah addressed the heads of African securities exchanges, private equity leaders, and venture capital representatives.

“As the architects of Africa’s capital markets, you are custodians of our continent’s future,” he said. “The capital markets are the bedrock upon which long-term, sustainable economic growth is built.”

He emphasised that Africa’s growth potential is immense, but its financial systems remain fragmented, underdeveloped, and heavily dependent on expensive external borrowing.

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Africa Faces a Massive Financing Gap—and Capital Markets Hold the Key

Africa’s development financing shortfall is estimated at $200–300 billion annually, a gap that the AfDB argues can only be closed through a new financial architecture rooted in:

• Local capital mobilisation

• Deepened pension and insurance markets

• Strengthened stock exchanges

• A vibrant private equity and venture ecosystem

• Digitised and interconnected financial markets

Speakers at the summit highlighted the severe mismatch between Africa’s financing needs and currently available capital.

Pension Funds as a Missed Opportunity

Dr Félix Edoh Kossi Amenounvé, CEO of the West African Regional Stock Exchange (BRVM), noted:

“African pension funds were originally created to finance governments. We need reforms for these funds to also invest in the private sector and long-term development.”

Mobilising these domestic pools of capital—believed to exceed $400 billion across the continent—is a top priority.

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Key Financial Powerhouses at the Meeting

Institutions represented include:

• African Exchange Linkage Project (AELP)

• Rwanda, Mozambique, Cabo Verde, Tunis, and Nairobi Stock Exchanges

• Casablanca and Ghana Stock Exchanges

• Central African Stock Exchange

• Major private equity and venture capital associations

• DFIs and institutional investors

This diverse representation underscores the AfDB’s push for a continental financial coalition for development.

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Four Cardinal Points: AfDB’s Strategic Vision

The consultations reflect President Ould Tah’s Four Cardinal Points, which prioritise:

1. Predictable and affordable long-term financing

2. Capital market integration and strengthening

3. Private sector empowerment

4. Financial resilience and structural reform

Under this strategy, the Bank is pursuing a comprehensive approach to capital market development.

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Focus on SMEs, Innovation, and Venture Capital

SMEs—representing 90% of African businesses and over 60% of jobs—remain chronically underfunded.

A major objective of the summit is to:

• Reinforce African private equity and VC funds

• Expand financing for SMEs, mid-market firms, and emerging industrial champions

• Reduce reliance on overseas development assistance

• Unlock capital for startups and next-generation industries

Participants discussed reforms to boost innovation, fintech adoption, and financial literacy among African youth.

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Challenges Identified: Regulation, Policy Alignment, and Digitalisation

Leaders across exchanges pointed to several barriers:

1. Regulatory Fragmentation

Ms Sonia Ben Frej, Chairwoman of the Tunis Stock Exchange, noted:

“Many of our regulations are outdated. We need regulatory convergence to unlock capital.”

2. Policy Coordination Across Countries

Nairobi Stock Exchange’s Donald Waweru Wangunyu stressed the need for regional cooperation:

“We have good projects. But the obstacles remain—scaling up requires coordination.”

3. Digitalisation and Fintech Usage

Participants highlighted the need to expand:

• Digital trading platforms

• Cross-border settlement systems

• Data tools for investors

• Digital investor education programmes

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AfDB’s Three Pillars for a New African Financial Architecture

Dr Ould Tah outlined three core pillars for the Bank’s future engagement:

1. Strengthen Capital Market Institutions

Support for regulators, stock exchanges, and intermediaries through:

• Technical assistance

• Governance reforms

• Policy-based operations

2. Diversify Market Participation

Promoting deeper markets through:

• Institutional investors

• Credit enhancement firms

• Insurance and pension capital pools

3. Boost Knowledge, Research, and Training

Building capacity through:

• Policy dialogue

• Training programs

• Research partnerships

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Creating a Unified Financial Ecosystem for Africa’s Next Stage of Growth

The summit marks a strong commitment to financial sovereignty, regional capital integration, and African-led solutions.

Dr Ould Tah concluded with a call for unity and shared responsibility:

“We will build it together. A New African Financial Architecture requires a collective effort from each one of us.”

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Next Steps: Continued Consultations with DFIs

The two-day engagements will continue with meetings involving:

• Heads of African Development Finance Institutions (DFIs)

• Policy experts

• Investment fund managers

• Regional regulators

The outcomes of the summit are expected to shape key interventions, reforms, and collaborative initiatives that will underpin Africa’s long-term financial resilience and growth trajectory.