Senior policymakers, development financiers, and private sector leaders have backed the African Development Bank’s New African Financial Architecture for Development (NAFAD), a major initiative designed to unlock African capital and address the continent’s estimated $400 billion annual development financing gap.

The discussions took place during the AfDB Annual Meetings in Brazzaville, where participants explored how Africa can mobilise capital at scale to support infrastructure, industrialisation, climate resilience, energy access, and inclusive economic growth.

NAFAD, which has already received endorsement from the African Union, is being positioned as one of the continent’s most ambitious efforts to reduce dependence on external financing and build stronger African-led financial systems. The initiative aims to mobilise domestic savings, deepen local capital markets, expand guarantee systems, and improve coordination between development institutions and private investors.

Speakers at the event repeatedly stressed that Africa’s financing problem is less about a lack of money and more about weak systems for organising and deploying available capital effectively. Estimates presented during the meetings suggested that Africa holds close to $4 trillion in institutional capital through pension funds, sovereign wealth funds, insurance assets, and banking systems, but much of this remains fragmented and disconnected from development financing.

AfDB Vice President for Private Sector, Infrastructure and Industrialization Solomon Quaynor described the challenge using a power sector analogy, arguing that African institutional capital should serve as the “base load” of development finance while international investors provide additional “peak load” funding through blended finance structures.

Several participants argued that perceptions of risk continue to discourage investment into African markets despite improving economic fundamentals across many countries. Financial experts said high borrowing costs, limited liquidity, weak exit opportunities, and shallow capital markets still make it difficult to attract large-scale institutional investment into long-term projects.

Africa50 CEO Alain Ebobissé noted that the continent’s bigger challenge is often the shortage of investable projects prepared at sufficient scale rather than the absolute lack of funding. He called for stronger project preparation systems capable of producing bankable infrastructure and industrial opportunities.

Other speakers highlighted the need for more integrated regional capital markets and local currency financing systems. TDB Group President Admassu Tadesse argued that investors are unlikely to commit long-term capital if they cannot easily exit investments through functioning secondary markets.

The role of guarantees and risk-sharing mechanisms also featured prominently during the discussions. Development finance experts explained that guarantee institutions can absorb part of the political or early-stage investment risk, making projects more attractive to pension funds, insurers, and commercial lenders.

African Guarantee Fund Chairman Felix Bikpo argued that reducing perceived risk could unlock major financing flows into small and medium-sized enterprises, which remain among the continent’s most important drivers of employment and economic activity.

Participants further stressed that domestic resource mobilisation will become increasingly important as global development assistance declines and external financing conditions tighten. Aid flows from wealthier nations have weakened in recent years, forcing African governments and development institutions to search for more sustainable internal financing models.

AfDB President Sidi Ould Tah has made NAFAD one of the institution’s flagship priorities, with the bank also planning to increase support for institutions such as the African Trade and Investment Development Insurance (ATIDI), which helps de-risk investments across African markets.

Overall, the discussions reflected growing consensus that Africa’s long-term economic transformation will depend heavily on its ability to mobilise and coordinate its own financial resources. Stakeholders agreed that stronger financial architecture, deeper capital markets, improved guarantees, and better project preparation systems will be essential to unlocking the continent’s next phase of growth.