Africa has about $1.8 trillion in pension, sovereign wealth and other institutional assets, but much of the money is invested outside the continent, limiting its ability to finance development, according to Professor Benedict Oramah, former president of Afreximbank.
The continent also holds between $300 billion and $500 billion in foreign-exchange reserves, much of it abroad, Oramah said in an interview at AAM 2026 (Afreximbank Annual Meetings). African countries have therefore struggled to access their own capital even as they face large infrastructure and investment gaps.
“Africa owned those foreign exchange reserves, but Africa did not and does not control those resources,” Oramah said.
The former Afreximbank chief argued that the problem is less a shortage of capital than the policies and investment assumptions governing where African institutions place their money. Pension funds, central banks and sovereign wealth funds often invest outside their own economies, even as infrastructure deficits persist within the continent, he said.
That creates what Oramah described as a “paradox of poverty in the midst of plenty,” with African capital helping finance development elsewhere while the continent continues to seek external funding.
Oramah said Afreximbank faced similar resistance when it began expanding its African central-bank deposit program. Investment guidelines at some central banks encouraged them to keep reserves abroad, while institutional attitudes also reflected concerns about the perceived risks of placing funds with African institutions.
Changing those practices required a shift in mindset and, in some cases, a rewriting of investment policies, he said.
The approach eventually produced results. Before leaving office, Oramah said Afreximbank had attracted about $50 billion in deposits from central banks and sovereign wealth funds, up from nothing.
The change also helped demonstrate to commercial banks, central banks and sovereign wealth funds that African financial institutions could hold and manage their capital, he said.
For Afreximbank, the increased deposits had a direct financing benefit. Oramah said the institution’s cost of funds fell by between 100 and 200 basis points, allowing those savings to be passed on through lower-cost financing to African borrowers.
Oramah urged African policymakers to review investment regulations by examining how countries such as China and India used financial rules during periods of economic transformation.
He said some African regulations remain based on assumptions inherited from the colonial era and have not been sufficiently reconsidered since independence.
“We have to work first to change those assumptions,” he said.
The challenge, according to Oramah, is not simply to increase the amount of capital available in Africa but to give African institutions greater control over capital already generated by the continent.
He said African investors should also be prepared to take risks and learn from investment failures rather than allowing fear of losses to prevent capital from being deployed locally.
“We should not be afraid of failure,” Oramah said. “Let us lose it. It’s our money.”
For Oramah, retaining more African capital on the continent would provide a foundation for financing infrastructure, industrialization and businesses capable of creating value locally, reducing the need to rely exclusively on foreign capital.
