Africa’s domestic capital base has reached a scale that now exceeds external financing flows over the past decade, marking a turning point in how the continent funds its growth and industrialisation, according to the Africa Finance Corporation’s (AFC) State of Africa’s Infrastructure Report 2026.

The report finds that cumulative external flows to Africa totalled approximately $1.7 trillion between 2014 and 2024, while Africa’s non-bank domestic capital pools exceeded $2 trillion by the end of 2025.

Africa’s own capital base, the report argues, has the scale to offset declining external financing – provided it is effectively intermediated and channelled into infrastructure and industrial development.

Launched at The Africa We Build Summit in Nairobi, co-hosted by AFC and the Government of Kenya, the 2026 report indicates that the overarching development priority has shifted from capital mobilisation to intermediation, converting savings into infrastructure, industry, and productive investment at scale.

"The constraint is no longer capital, it is intermediation," Samaila Zubairu, President & CEO of AFC, said at the The Africa We Build Summit today. "We have the savings, but not yet the systems to channel them into infrastructure and industry at scale.”

"Closing that gap is now Africa’s most important economic task. The next phase of Africa’s infrastructure story must move beyond standalone assets towards integrated systems," he added.

Driving the increase in domestic institutional capital, pension and insurance assets have surpassed $1 trillion for the first time. Public development bank assets stand at $276 billion, and sovereign wealth funds at $164 billion, while central bank reserves increased from $480 billion in 2024 to $530 billion in 2025.

This increase has been supported in part by stronger commodity dynamics and rising gold accumulation. Gold now represents approximately 17 per cent of Africa’s total reserves, up from less than 10 per cent in 2022–2023, while physical holdings rose from 663 tonnes in 2022 to an estimated 738 tonnes in 2025.

Despite its increased scale, domestic capital remains largely concentrated in short-term, low-risk assets, particularly government securities, reflecting limited investable pipelines, regulatory incentives favouring liquidity, and insufficient risk-sharing mechanisms. The result is a persistent gap between available savings and long-term productive investment.

External financing recedes

At the same time, external financing is becoming less reliable, reinforcing the case for a domestic capital-led development model. Official development assistance to Africa fell from $83.8 billion in 2020 to $73.5 billion in 2023 and is projected to decline further.

The Organisation for Economic Co-operation and Development (OECD) estimates that global official development assistance fell 23.1 per cent in 2025, the largest annual contraction on record.

Sovereign issuance remains well below pre-2019 levels, falling from over $29 billion in 2018 to $4–6 billion annually in 2022–2023, while foreign direct investment has remained concentrated at roughly $45–55 billion annually, insufficient to meet the continent’s broad investment needs.

As a result, external capital is increasingly complementary, rather than foundational, to Africa’s development model. The biggest potential for capital deployment lies in demand-driven integrated infrastructure, according to the report.

In transport and logistics, corridors deliver the greatest value when designed as production ecosystems rather than transit routes—linking ports, rail, roads, logistics, storage, and trade facilitation to industrial demand.

This is particularly evident in East Africa. Mombasa—one of Africa’s busiest ports—handles more than 45 million tonnes of cargo annually, while rail investments are extending connectivity inland, including along the Naivasha–Kisumu corridor.

In aviation, the 2026 report identifies air transport as the most immediate and scalable lever for integration. Across Kenya, Rwanda, and Ethiopia, aviation contributes a combined $5.5 billion to GDP and supports around one million jobs, demonstrating how connectivity can rapidly translate into trade and growth.

"Aviation is a low hanging fruit for Africa and we believe it is key to achieving the African Continental Free Trade Agreement (AfCFTA),” Rita Babihuga-Nsanze, AFC’s Chief Economist and Director of Research & Strategy, said.

Similarly, in energy, the priority is no longer incremental capacity additions alone, but integrated systems combining generation, transmission, storage, fuels, and industrial demand. Cross-border infrastructure such as the Ethiopia–Kenya interconnector shows how regional systems can move power to where it is needed most and improve system-wide efficiency.

Resilience gap

Recent shocks, from Russia–Ukraine to the 2026 Middle East crisis, underscore the cost of fragmented systems and the urgency of building domestic processing, storage, and supply-chain resilience.

The continent continues to import over 70 per cent of its refined fuel and faces an estimated $230 billion annual import bill across essential goods, including fuel, food, plastics, steel, and fertiliser, according to the report.

In digital infrastructure, while connectivity has expanded rapidly, the next opportunity lies in building the "missing middle”—terrestrial backbone networks, metro fibre, data centres, Internet Exchange Points, and enterprise platforms that convert connectivity into productivity, services exports, and job creation.

Across all sectors and African countries, the report’s conclusion is consistent, suggesting that the development challenge is increasingly institutional and systemic. Capital exists, and infrastructure assets are expanding.

According to the report, the next breakthrough will come from linking finance, energy, transport, industry, and digital systems into coherent ecosystems capable of supporting growth at scale.