Africa Investment Forum Calls for Innovation to Bridge Huge Finance Gaps by 2050

The climate-finance gap is even starker: Africa receives just $30 billion of the $300 billion it needs each year to build resilience and support green transitions.

Senior policymakers, global investors, finance executives and development institutions gathered on Thursday for the 2025 Africa Investment Forum (AIF) Market Days, confronting one of the continent’s largest and most urgent challenges: closing the massive infrastructure and climate-finance gaps threatening Africa’s future development trajectory.

The high-level panel, “Innovative Finance Instruments Powering Africa’s Sustainable Transformation,” offered a bold appraisal of Africa’s looming demographic and climate pressures while charting out modern, scalable financial models needed to support the continent’s ambitions.

A Demographic Tipping Point with Too Little Investment

Moderated by Zineb Sqalli, Partner and Managing Director at Boston Consulting Group, the session began with a data-driven warning: by 2050, Africa will welcome an additional one billion people—more than half of them in rapidly growing cities.

Yet current investment patterns fall drastically short. Africa invests only $75 billion of the $150 billion required annually for infrastructure such as energy, transportation, housing, water networks and digital connectivity. The climate-finance gap is even starker: Africa receives just $30 billion of the $300 billion it needs each year to build resilience and support green transitions.

Sqalli stressed that while the gaps are daunting, they reveal an enormous opportunity for innovation. Trends such as blended finance, Islamic green bonds, diaspora investment vehicles, and regional infrastructure platforms demonstrate that capital is available—if the right structures exist to mobilise it.

Food Security as a Strategic Investment Priority

Setting a serious tone on financing Africa’s food systems, Dr Obaid Saif Hamad Al-Zaabi, Chairman of the Arab Authority for Agricultural Investment and Development, argued that climate-driven shocks and rising food insecurity demand a complete transformation in agricultural finance.

He urged governments and investors to treat the entire food-security value chain—from seed systems to storage and logistics—as a strategic asset class deserving specialised investment tools. Calling climate change “a financial risk on our balance sheets,” he warned that failing to redesign food-system finance will expose Africa and the Arab world to deeper shocks.

Al-Zaabi advocated for:

• Enhanced guarantees to attract private capital

• Sustainable finance instruments tailored to agriculture

• Dedicated financing vehicles for smallholder farmers, the “engine” of Africa’s food ecosystem

• Greater digitalisation to address information gaps and improve investor confidence

Bankable Projects: Africa’s Most Persistent Constraint

Former Senegalese Minister of Economy and current Chair of the Africa Advisory Board of Vision Invest, Amadou Hott, described the shortage of bankable projects as the continent’s most critical bottleneck.

“If we want to transform the continent, we need to multiply what we are doing today by 100 or even 150,” Hott said, noting that project-preparation facilities remain underfunded despite their importance in structuring viable large-scale investments.

Hott also flagged currency risk as a major deterrent for investors, urging African governments to mobilise more domestic capital—from sovereign wealth funds, pension funds, and foreign reserves—much of which is currently deployed in overseas markets.

Inclusive Finance: A Foundation for Sustainable Growth

Adding to the call for systemic reform, Dr Nasser Al-Kahtani, Executive Director of the Arab Gulf Programme for Development (AGFUND), underscored that Africa cannot meet its development targets without expanding inclusive finance.

He highlighted a stark contradiction: 70% of Africa’s food is produced by smallholder farmers, yet millions of them remain unable to access credit, technology or equity. “They save the world, but cannot feed themselves,” he said.

Al-Kahtani pushed for blended-finance approaches that move communities “from grants to investment,” enabling micro-entrepreneurs to build long-term assets.

Private Capital and New Financial Structures

From the private-sector financing perspective, Jacques Kanga, Director and Head of Finance at Algest Investment Bank, outlined tools that could significantly elevate private capital participation to close the annual $130-$170 billion infrastructure gap.

These include:

• Infrastructure Special Purpose Vehicles (SPVs) to mitigate sovereign and political risk

• Blended-finance structures that reduce financing costs

• Diaspora-backed instruments, tapping into the $95 billion Africans abroad remit each year

Kanga emphasised that effective deployment of these tools strengthens transparency and governance—factors that global investors consistently identify as investment prerequisites.

Building the Legal Architecture for Investment

Legal expert Ouns Lemseffer, Partner at Ashurst, pointed to promising reform momentum across the continent. She noted that several African countries have adopted advanced securitisation laws, sustainable-finance frameworks, and enabling legislation for Sukuk, project bonds, debt funds and electrification initiatives such as Côte d’Ivoire’s landmark Programme Électricité Pour Tous.

However, she cautioned that legal reforms remain fragmented. “A sophisticated legal framework in one area is not enough,” Lemseffer said. A holistic, continent-wide approach is needed—from investor-protection rules to bankruptcy reforms—to fully unlock capital markets for long-term infrastructure investment.

A Unified Call for Transformation

As the session concluded, the message was unequivocal: Africa’s transformation depends on modernising its financial ecosystem.

Panelists agreed that addressing the continent’s demographic pressures, climate vulnerabilities, and infrastructure demands will require:

• Rapid scaling of innovative financial instruments

• Investment-ready project pipelines

• Stronger domestic capital mobilisation

• Comprehensive legal and regulatory reforms

• Deep public-private collaboration

The 2025 Africa Investment Forum made clear that innovative finance is not optional but essential. Only by mobilising capital at unprecedented scale can Africa convert its immense opportunities into transformative, bankable, and climate-resilient projects capable of powering the continent into a sustainable future.