Addressing the cost of capital for the continent’s financial future

The Summit will work to identify tangible, African-led solutions that unlock capital for the continent's development, backed by initiatives designed to address both external constraints and perceptions, and internal capacity gaps that perpetuate the high cost of capital.

Attendees at the Summit believe that the present reality, where a continent rich in human talent and natural resources is held back by borrowing costs, is unsustainable. African countries pay up to 500% more for capital market loans than they would for financing from Multilateral Development Banks (MDBs). With external debt service projected to reach $89 billion in 2024, more money is flowing out of developing countries in repayments than is flowing in through new financing and development assistance.

Attendees recommended an action-oriented approach to lower the cost of capital within the next 12-36 months. These initiatives will be championed by a coalition of willing African institutions and actors, ensuring solutions are context-specific, self-determined, and aligned with the continent's priorities.
 
They included:

• Aiming to make the global financial architecture work for Africa by advocating for change globally and enhancing Africa's influence in setting international standards and rules to create a more equitable global financial system.
• Strengthening government capacity, encouraging leaders to invest strategically, shaping markets that reward innovation, reducing reliance on borrowing, and increasing development spending.
• Improving the quality of data, methodology, and availability of African research by ensuring that financial data is accurate, timely, and transparent
• Changing the narrative by using evidence-based campaigns to reshape perceptions of Africa from "risk and assistance" to "opportunity and investment”

Sim Tshabalala, CEO of Standard Bank said: “We believe that the ideas discussed at this Summit could make a lasting and transformative difference for the economies and people of Africa. This is not just about building roads and bridges, it is about building opportunity, resilience and prosperity.”

Marcus Courage, CEO of Africa Practice said: "When it comes to economic growth, some nations get harnesses for the ascent, while African countries must climb with weighted vests. We simply can't realise Africa's full potential—a potential that benefits the entire world—until we tackle the structural and dynamic factors that drive up its capital costs.’'
 
Dr Misheck Mutize, Lead Expert on Credit Ratings, at APRM said: “The call for reform of the global financing architecture is becoming clearer, it is not empty noise, The global institutions need to pay attention to the merits in these calls. If they remain fixated on short-term benefits and outdated models, they may soon find themselves irrelevant as the developing world builds credible alternatives.”

Didi Okonkwo Nwuneli, President/CEO of the ONE Campaign said: "Affordable capital is a lifeline for Africa, not a luxury. It's time the cost of capital reflects our potential, not outdated risk narratives. This forum is a critical step toward solutions driven by African voices and real urgency.”