The African Development Bank (AfDB) has stated that African countries could save as much as $299 billion annually through improved public investment efficiency while unlocking trillions of dollars in development financing through stronger reforms and better domestic resource mobilisation.
The disclosure was contained in the 2026 African Economic Outlook (AEO) report released during the Bank’s Annual Meetings in Brazzaville.
Published under the theme, “Mobilizing Africa’s Development Financing at Scale in a Fragmented World,” the report highlighted both the continent’s growing fiscal pressures and the significant untapped opportunities capable of accelerating economic transformation and infrastructure development.
What the report is saying
The AfDB report identified several major financing opportunities that could significantly strengthen Africa’s development capacity if properly harnessed.
- African countries could generate an estimated $469 billion in additional annual revenues through stronger tax and non-tax mobilisation reforms.
- The Bank stated that every additional dollar invested publicly could attract about $1.40 in private investment through stronger public-private partnerships (PPPs).
- Institutional investors globally currently manage close to $4 trillion in assets, but less than 2.7% of those funds are allocated to Africa’s infrastructure and productive sectors.
The AfDB stated:
- “Among the key opportunities identified are an estimated $469 billion in additional annual revenues from stronger tax and non-tax mobilisation, alongside roughly $299 billion in potential savings from improved public investment efficiency.”
- “Institutional investors, including pension funds, insurers and sovereign wealth funds, manage around $4 trillion in assets; yet less than 2.7 percent is allocated to infrastructure and productive sectors in Africa, underscoring significant untapped potential.”
The report described the low level of institutional investment in Africa as a major missed opportunity for the continent’s long-term development.
More Insights
Despite global geopolitical tensions, supply chain disruptions, and tighter financial conditions, the AfDB projected that Africa would remain one of the world’s fastest-growing regions over the medium term.
- East Africa is projected to remain the continent’s fastest-growing region, although growth is expected to slow to 5.9% in 2026 from 6.6% in 2025 due to rising energy and import costs linked to Middle East tensions.
- West Africa’s growth is forecast at 4.7% in 2026, supported by agricultural expansion and infrastructure investments.
- Central Africa is expected to record modest improvement, with growth projected at 3.8% in 2026 from 3.6% in 2025, largely driven by high oil prices.
- Southern Africa is projected to remain the slowest-growing region, with growth easing to 2.1% due to weaker mining output, lower agricultural productivity, and rising energy costs.
The report also highlighted Africa’s widening development financing gap, estimating that the continent currently faces an annual shortfall exceeding $1.3 trillion needed to achieve the United Nations Sustainable Development Goals (SDGs).
According to the Bank, the financing gap is being worsened by weak domestic revenue mobilisation, rising debt pressures, illicit financial flows, shallow financial systems, and tighter global financing conditions.
What you should know
The AfDB believes Africa has the financial potential to significantly narrow its development financing gap if governments deepen reforms and strengthen economic institutions.
- The Bank estimated that Africa could unlock up to $1.43 trillion annually through stronger tax systems, improved public spending efficiency, deeper capital markets, reduced corruption, and expanded public-private partnerships.
In November, AfDB approved a $500 million loan to the Federal Government of Nigeria to finance the second phase of the Economic Governance and Energy Transition Support Programme.
As of 31 October 2025, the AfDB’s active portfolio in Nigeria consisted of 52 projects valued at $5.1 billion.
