Africa’s $777 Billion Pension And Insurance Assets Hold Key To Growth, Says AFC.
Africa’s vast pension and insurance assets, totalling $777 billion (£610 billion), could be a game-changer for the continent’s economic growth, according to the Africa Finance Corporation (AFC). In its recently released 2025 State of Africa’s Infrastructure (SAI) Report, titled “Mobilising Domestic Capital,” the AFC highlights the transformative potential of these funds, urging African nations to redirect this capital towards critical infrastructure and industrial development.
The report reveals that Africa holds over $4 trillion (£3.14 trillion) in domestic savings, with $1.1 trillion (£860 billion) in long-term institutional capital, including $455 billion (£357 billion) in pension funds and $320 billion (£251 billion) in insurance assets. Combined with $2.5 trillion (£1.96 trillion) in commercial banking assets and $470 billion (£369 billion) in central bank reserves, this financial muscle represents an untapped resource for addressing Africa’s pressing infrastructure needs, from railways and power generation to industrial hubs.
“With over $777 billion in assets under management, pension funds and insurance companies hold substantial potential to finance long-term development. Yet they remain a major untapped source of development finance for Africa,” the AFC stated. The report notes that much of this capital is currently parked in low-risk, short-term instruments like government bonds, rather than being channelled into the real economy to drive transformative projects.
The AFC points to progress in countries like Nigeria, South Africa, and Kenya, where efforts to align savings with development needs are gaining traction, albeit slowly. In Nigeria, for instance, pension fund exposure to infrastructure has grown from a mere 0.02% to 1% of total assets since 2017, reaching over N242 billion (£190 million) by early 2025—one of the largest pools of institutional capital on the continent. This shift has been supported by market-based, de-risking mechanisms like InfraCredit, a Nigerian initiative backed by the Nigeria Sovereign Investment Authority and others, which provides local currency guarantees to make infrastructure bonds more attractive to pension funds.
However, challenges persist. Legal restrictions and a lack of suitable financial instruments often limit the ability of pension and insurance funds to invest in long-term projects. The AFC calls for targeted policy reforms, financial innovation, and risk-mitigation tools—such as pooled funds and investment platforms—to unlock this capital. “Africa’s renewed focus on domestic resource mobilisation should be viewed as a necessary rebalancing—towards maximising the value of internal capital while using external resources more strategically,” the report emphasises.
The stakes are high. The African Development Bank estimates Africa’s annual financing gap for structural transformation at more than $400 billion (£314 billion), or nearly 14% of the continent’s projected GDP by 2030. With foreign direct investment and official development assistance proving “increasingly insufficient” amid global challenges like higher interest rates and declining donor budgets, the AFC argues that African-led investment is the foundation for scaling power, transport, and industrialisation.
Samaila Zubairu, President and CEO of the AFC, commented, “This report provides a practical roadmap for how Africa can channel its significant financial strength into the infrastructure needed to drive industrial transformation—from scaling electricity supply to revitalising rail and building up strategic industries like steel and fertilisers. The tools exist. The capital is available. What’s needed now is coordinated action to unlock it.”
As Africa grapples with a rapidly growing population and expanding economies, the AFC’s clarion call underscores a pivotal opportunity: harnessing the continent’s $777 billion in pension and insurance assets to fuel a self-reliant, prosperous future.
For more details, the full 2025 State of Africa’s Infrastructure Report is available at the Africa Finance Corporation’s website.
