African Institutions Urged to Fund Local Infrastructure
The Africa Finance Corporation reports a 25 percent rise in local capital driven by high gold prices. Leaders now urge domestic funds to pivot toward projects.
African financial institutions are being called upon to pivot their growing capital reserves toward infrastructure development to stimulate economic growth across the continent. According to the State of Africa’s Infrastructure Report released by the Africa Finance Corporation (AFC) on Thursday, capital held by local institutions—including central banks, sovereign wealth funds, and development banks—surged by 25% over the past year, reaching more than $2 trillion compared to $1.6 trillion previously.
This significant increase was largely attributed to the rising value of Gold holdings as prices hit record highs on international markets. Despite this liquidity, the AFC notes that domestic funds remain overly concentrated in low-risk assets like government bonds, which do not sufficiently drive productive economic activity.
