Bolstering AfCFTA Infrastructure: The Role of African IFIs

The document examines the critical role of African IFIs in bridging the continent's infrastructure gap to enable the AfCFTA. It highlights a significant annual financing need of $130–$170 billion, with transport being the most deficient sector. While IFIs like the AfDB, AFC, and Afreximbank have invested billions, the author argues that financing still relies too heavily on governments with limited fiscal space. The brief recommends establishing a results-oriented coordination model and a dedicated agency to improve project bankability to better attract private institutional investors.

• Africa faces a severe infrastructure deficit compared to other regions; its total physical capital stock is estimated at approximately 7.4% of that in advanced economies, 16% of China's, and 46.4% of South America's.
• The annual infrastructure financing requirement for Africa is estimated between $130 billion and $170 billion, but only about $80 billion is currently raised. The largest financing gap is in transport infrastructure, accounting for 73% of the total gap.
• Inadequate infrastructure significantly inflates trade costs within Africa, with transport costs estimated to be 50% to 175% higher than global averages. These costs can represent up to 40% of the final price of goods on the continent.
• African governments remain the primary funders of infrastructure, contributing over 40% of total financing, but their capacity is hindered by low tax-to-GDP ratios and rising debt-to-GDP levels.
• Private sector participation in major initiatives remains very low; for example, the private sector has contributed only 3% of the overall investment for the Programme for Infrastructure Development in Africa (PIDA).
• The AfCFTA Adjustment Fund, established in 2023 through a collaboration between Afreximbank, the AfCFTA Secretariat, and the AU Commission, requires an estimated $10 billion over the next 5–10 years, though Afreximbank has already committed $1 billion.
• To attract private capital, the author proposes the creation of a dedicated infrastructure development think tank or agency focused specifically on identifying and preparing bankable projects that align with AfCFTA trade integration goals.

APA

MOPIPI, K. N. (2025). Bolstering AfCFTA Infrastructure: The Role of African IFIs. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2025/06/SAIIA_PI-163_RoleOfAfricanIFIs.pdf

Chicago

MOPIPI, KESAOBAKA NANCY. Bolstering AfCFTA Infrastructure: The Role of African IFIs. South African Institute of International Affairs, 2025. https://saiia.org.za/wp-content/uploads/2025/06/SAIIA_PI-163_RoleOfAfricanIFIs.pdf.

Wikipedia

{{cite report |last1=MOPIPI |first1=KESAOBAKA NANCY |title=Bolstering AfCFTA Infrastructure: The Role of African IFIs |publisher=South African Institute of International Affairs |date=June 2025 |url=https://saiia.org.za/wp-content/uploads/2025/06/SAIIA_PI-163_RoleOfAfricanIFIs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mopipi2025bolstering, author = {MOPIPI, KESAOBAKA NANCY}, title = {{Bolstering AfCFTA Infrastructure: The Role of African IFIs}}, institution = {South African Institute of International Affairs}, year = {2025}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2025/06/SAIIA_PI-163_RoleOfAfricanIFIs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }