African leaders and financial institutions are advancing a new strategy aimed at reducing dependence on foreign aid and external borrowing. The African Development Bank (AfDB) is leading discussions on a proposed financial framework designed to mobilise domestic capital across the continent.
The plan, known as the New African Financial Architecture for Development, focuses on pooling Africa’s estimated trillions in pensions, sovereign wealth funds, and private savings. The goal is to redirect internal funds into infrastructure, energy, and industrial projects.
This push comes as global development assistance has fallen significantly in recent years, particularly from major Western economies. The reduction has created pressure on African economies that rely on concessional loans and grants.
Experts say the initiative could transform Africa’s financial sovereignty if successfully implemented, but warn that coordination challenges and low savings rates may slow progress.
The African Development Bank says stronger intra-African investment will be key to closing the continent’s estimated annual $400 billion development gap.