AFC charts path to financial sovereignty through domestic capital mobilisation

By Seth KRAMPAH, back from Nairobi, Kenya

Africa possesses the capital required to fund its own development but has historically lacked the architecture to channel it effectively into productive infrastructure assets, the Senior Vice President and Head of Capital Mobilisation & Partnerships at the Africa Finance Corporation (AFC) Mohammed Abdul-Razaq, has told Business & Financial Times in an exclusive interview at the sidelines of the just-ended Africa We Build Summit 2026 in Nairobi,

According to him, pension funds, insurance companies, and sovereign wealth funds collectively hold trillions of dollars in assets under management, yet only a fraction is deployed in infrastructure on the continent. He described this as a paradox that the AFC is determined to resolve.

Abdul-Razaq explained that the AFC’s strategy rests on three pillars. He said the first is de-risking, where the institution uses its balance sheet and blended finance instruments to absorb early-stage risks that domestic institutional investors find prohibitive.

He noted that the second pillar is standardisation, which involves creating bankable, transparent project structures that pension funds can invest in with the same confidence they would place in a government bond.

He added that the third pillar is advocacy, where the AFC works with regulators and finance ministries to revise prudential frameworks that currently prevent institutional investors from allocating meaningfully to infrastructure. He stressed that regulatory inertia must not remain a barrier between African savings and African growth.

On the issue of reliance on external financing, Abdul-Razaq remarked that external capital is not inherently bad, but when it comes with conditionalities, currency mismatches, and geopolitical strings attached, it creates vulnerability.

He pointed out that the global shocks of the 2020s, including pandemics, interest rate cycles, and geopolitical conflicts, have repeatedly dried up external financing overnight.

He said the only durable answer is a deep, liquid domestic capital market that can fund infrastructure regardless of what is happening in New York, London, or Beijing. He described this as the financial sovereignty Africa must build toward.

Turning to partnerships, Abdul-Razaq said the model is evolving rapidly and in the right direction. He explained that the old paradigm, where multilateral institutions and foreign donors drove the agenda while domestic actors were passive recipients, is giving way to a more dynamic and equitable model.

He said domestic investors are now sitting at the table as co-architects of financing structures, not merely as junior participants. He emphasised that governments have a critical enabling role to play by creating policy certainty, fiscal incentives, and enabling legislation that gives domestic investors the confidence to commit long-term capital to infrastructure.

He noted that several African governments are actively reviewing their public-private partnership frameworks and tax treatment of infrastructure investment vehicles, which he described as encouraging reforms.

Abdul-Razaq also highlighted the catalytic role of regional development finance institutions. He said multilaterals like the African Development Bank and institutions like the AFC are most effective not as the primary source of capital, but as catalysts.

He explained that their role is to take the first loss, provide technical assistance, structure projects to international standards, and then step back as commercial and domestic institutional capital steps in.

He said this leverage model, where one dollar of AFC capital mobilises five to ten dollars of private and domestic capital, is how the continent can move the needle at scale.

Looking beyond 2026, Abdul-Razaq expressed optimism about the trajectory of Africa’s infrastructure financing landscape. He said that for the first time, finance ministers and central bank governors are speaking the same language as pension fund trustees and private equity managers, creating a convergence of intent that was absent five years ago.

He revealed that the AFC intends to publish a Domestic Capital Mobilisation Index that will track, country by country, the proportion of infrastructure investment funded from local sources. He said the aim is to make progress visible and inaction uncomfortable.

He added that domestic capital is patient capital that does not flee when global risk appetite falls, and a continent that finances its own infrastructure can weather global storms without losing development momentum. He concluded that this resilience dividend is closer than at any point in Africa’s history.

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