The Africa Finance Corporation (AFC) has cited Nigeria as an example of how market-based de-risking mechanisms can help mobilise pension capital for infrastructure investment without enforcing rigid allocation mandates.
This was revealed in the 2025 State of Africa’s Infrastructure Report, titled ‘Mobilising Domestic Capital’, with a call to redirect Africa’s $1.1 trillion institutional capital pool to finance long-term infrastructure development and drive industrial growth.
The report noted that while recent progress shows promise, infrastructure investment had long been constrained by credit and liquidity risks.
‘AFC’s new research conservatively estimates the value of Africa’s domestic capital pools at $4 trillion. This includes approximately $1.1 trillion in institutional capital, $2.5 trillion in commercial banking assets, and more than $470 billion in external reserves’.
The AFC said one of the biggest barriers to mobilising domestic capital is that most African countries lack the regulatory clarity and financial instruments needed to redirect capital flows.
‘With over $777 billion in assets under management, pension funds and insurance companies hold substantial potential to finance long-term development. Yet they remain a major untapped source of development finance for Africa’, it said.
According to the lender, countries like South Africa, Nigeria, and Kenya are beginning to align savings with development needs, but their ‘progress is slow’.
‘As of early 2025, Nigeria’s pension assets under management (AUM) stood at N22.8 trillion (approximately $14.2 billion) – one of the largest pools of institutional capital on the continent.
‘Allocations to infrastructure grew from just N1.2 billion (0.02% of AUM) to over N242 billion (1% of AUM), equivalent to about $155 million, thanks to targeted credit enhancement tools such as InfraCredit’, the report stated.
Speaking at the report’s launch, yesterday, President/CEO of AFC, Samaila Zubairu, stressed the importance of African nations taking ownership of their development agendas and demonstrating credibility as investment destinations.
