African policymakers and financiers are intensifying calls to strengthen the continent’s financial institutions and reduce reliance on external capital, as global economic shifts expose vulnerabilities in traditional funding systems.
At the Babacar Ndiaye Lecture hosted by the African Export-Import Bank (Afreximbank), senior officials argued that Africa must mobilise its own capital and reinforce homegrown lenders to sustain growth and manage shocks.
Afreximbank has disbursed more than $155 billion over the past decade, including a record $18.7 billion in 2024, according to its incoming president George Elombi. He said the bank’s expanding role underscores the need for institutions that can lend during crises when global liquidity tightens. “TThese are not just numbers or entries on a balance sheet. They represent lives and livelihoods. They represent jobs, trade, and hope,” Elombi said, defending the bank’s countercyclical lending model.
The remarks come as African economies face rising borrowing costs, driven in part by perceptions of elevated risk among international investors. Despite this, default rates in sub-Saharan Africa average 1.71%, broadly in line with other regions, while recovery rates exceed 95%, the bank said.
Former African Development Bank president Donald Kaberuka said structural changes in the global economy are making self-reliance more urgent. He pointed to weakening multilateral institutions, rising economic nationalism and the decline of traditional aid flows as long-term shifts reshaping capital access.
“The global trading system as we have known is dead,” Kaberuka said, citing growing fragmentation and the need for Africa to “fight for its space” in a multipolar world. He added that African institutional investors control more than $1.1 trillion in assets, a pool that remains underutilised for development financing.
A central issue is the “preferred creditor status” that allows multilateral lenders to be repaid ahead of others in times of distress. Officials warned that challenges to this status could raise funding costs and limit the ability of African institutions to lend during downturns.
Analysts at the event said risk perceptions, rather than underlying fundamentals, continue to inflate borrowing costs for African countries. Some argued that global credit rating frameworks penalise the continent due to structural factors such as limited access to reserve currencies and shallow capital markets. Still, not all speakers dismissed internal constraints. Kako Nubukpo said governance gaps and policy inconsistencies also contribute to investor caution, urging reforms to improve transparency and credibility.
The debate reflects a broader push to build a continental financial architecture, including proposals for an African Monetary Fund, African Investment Bank and eventually a central bank to support integration and stability.
For Afreximbank and its peers, the challenge is balancing expanded mandates with financial discipline. The lender has increasingly financed infrastructure, healthcare and industrial projects, arguing that trade growth depends on broader economic capacity.
As global capital becomes more selective, African officials say the case for stronger regional institutions is no longer theoretical. “It is time to organize, not agonize,” Kaberuka said.
