Audio By Carbonatix
The African Finance Corporation (AFC) said it is accelerating efforts to mobilise the continent's own money for investments, and tapping investors in the Middle East and Asia, as developing nations grapple with seismic shifts in geopolitics and funding flows.
Samaila Zubairu, chief executive of the AFC - a development finance institution owned by Nigeria's central bank and other African financial institutions - said in an interview the lender is ready to weather a world in which the United States and Europe cut financial aid and turn increasingly inward.
"The only thing we want ... to change, is to get domestic capital more available for investment within the continent," Zubairu said.
"We would accelerate our initiatives to mobilize domestic capital from African pension funds, African institutional investors, to invest domestically," he said, adding that in the long term, some $15-$20 billion could come from domestic pension funds.
U.S. President Donald Trump's America First agenda, and cuts in U.S. aid money, could drain billions from projects in Africa. European countries are also slashing aid funding, with Britain redirecting much of it to boost defence spending.
Africa's low savings rates and shallow markets have stymied efforts to mobilise local pools of cash.
Zubairu said the AFC, which deploys $2.5-$3 billion each year, would scale up fund allocation "prudently" by choosing projects other backers could pile into.
It launched the pilot project InfraCredit to support pension fund investments in much-needed infrastructure projects, with
oil-rich Nigeria's sovereign wealth fund providing guarantees on local currency debt.
The project has mobilised some 230 billion naira ($152 million), including investments from 21 pension funds, which previously invested almost exclusively in government debt.
Zubairu said he expects to launch similar programs as early as this year in Botswana, Angola and Kenya.
"This is kind of program that we think needs to be replicated at scale," he said. "If we do programs like this, then you see a lot more billions available for investment."
Pension funds had also placed money in the Infrastructure Climate Resilience Fund, boosting a $52 million commitment from the European Investment Bank, he said.
Investors from the Gulf and Europe are also looking to place money in other AFC projects, such as ARISE Integrated Industrial Platforms which designs and finances industrial projects.
Trump has yet to publicly signal his plans for U.S. investment in the Lobito Corridor - a railway project linking resource-rich Democratic Republic of Congo with Zambia and Angola's Atlantic port of Lobito.
Former U.S. President Joe Biden visited the site during his inaugural - and only - trip to Africa.
Zubairu said he was confident Trump would see the value in backing the corridor, though it was a strong, bankable framework that would move forward regardless.
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