Nigeria, Others Can Unlock $768bn Annually Through Investments — AfDB

African countries could unlock as much as $768bn annually through stronger domestic resource mobilisation and improved public investment efficiency, providing a significant boost to the continent’s development financing needs, according to the African Development Bank (AfDB).

The projection was contained in the Bank’s 2026 African Economic Outlook (AEO) report unveiled during the AfDB Annual Meetings in Brazzaville, Republic of Congo.

The report, themed “Mobilizing Africa’s Development Financing at Scale in a Fragmented World,” examines the continent’s fiscal challenges and outlines opportunities for mobilising resources needed to drive sustainable economic growth and development.

According to the report, African economies stand to generate an estimated $469bn in additional annual revenues through enhanced tax administration, broader tax bases, improved collection systems, and stronger non-tax revenue mobilisation.

The Bank also estimated that governments could save approximately $299bn annually by improving the efficiency of public investments and reducing waste in project implementation.

The AfDB noted that harnessing these opportunities could substantially narrow Africa’s widening development financing gap, which currently exceeds $1.3trn annually, an amount required for the continent to achieve the United Nations Sustainable Development Goals (SDGs) and meet critical infrastructure, climate adaptation, health, education and industrialisation targets.

“Among the key opportunities identified are an estimated $469 billion in additional annual revenues from stronger tax and non-tax mobilisation, alongside roughly $299bn in potential savings from improved public investment efficiency,” the report stated.

The Bank stressed that improving public financial management and strengthening governance frameworks would enable African governments to maximize the impact of scarce resources while attracting greater private sector participation in development projects.

A major opportunity highlighted in the report is the potential to crowd in private investment through well-structured public-private partnerships (PPPs). According to the AfDB, every additional dollar invested by governments could attract approximately $1.40 in private capital if supported by transparent regulatory frameworks and bankable projects.

The report further identified global institutional investors, including pension funds, insurance companies and sovereign wealth funds, as a largely untapped source of financing for Africa’s development agenda.

Collectively, these investors manage nearly $4 trillion in assets globally. However, less than 2.7 per cent of these funds are currently allocated to infrastructure and productive sectors across Africa.

The Bank described this low allocation as a missed opportunity, arguing that appropriate reforms, improved risk mitigation mechanisms and stronger capital markets could help attract a greater share of institutional capital into African economies.

“Institutional investors, including pension funds, insurers and sovereign wealth funds, manage around $4 trillion in assets; yet less than 2.7 per cent is allocated to infrastructure and productive sectors in Africa, underscoring significant untapped potential,” the report noted.

Despite mounting global uncertainties, including geopolitical tensions, supply chain disruptions, inflationary pressures and tighter financial conditions, the AfDB maintained a positive outlook for Africa’s economic prospects.

The Bank projected that Africa would remain among the fastest-growing regions globally over the medium term, supported by ongoing infrastructure investments, demographic advantages, expanding consumer markets and continued economic reforms in several countries.

Regionally, East Africa is expected to retain its position as the continent’s fastest-growing sub-region, although growth is forecast to moderate to 5.9 per cent in 2026 from 6.6 per cent in 2025.

The slowdown is attributed primarily to rising energy and import costs linked to tensions in the Middle East.
West Africa is projected to record growth of 4.7 per cent in 2026, driven by increased agricultural production, infrastructure development and improved economic activity across several countries.

Central Africa’s economy is expected to expand by 3.8 per cent in 2026, up from 3.6 per cent in the previous year, benefiting largely from elevated oil prices and improved commodity earnings.

Meanwhile, Southern Africa is forecast to remain the continent’s slowest-growing region, with economic growth easing to 2.1 per cent due to weaker mining output, declining agricultural productivity and persistent energy challenges.

The AfDB emphasized that while Africa’s growth outlook remains relatively resilient, achieving sustainable and inclusive development will depend largely on governments’ ability to implement reforms, strengthen institutions, mobilise domestic resources and attract greater private investment.

The Bank concluded that unlocking existing financing opportunities within the continent could significantly reduce dependence on external borrowing and position African economies for stronger long-term growth amid an increasingly fragmented global economic landscape.