African Financial Institutions Demand Coordinated Financing Solutions to Accelerate Digital Transformation
African multilateral financial institutions, alongside policymakers and private sector leaders, are advocating for more coordinated and innovative financing strategies to facilitate the continent’s digital transformation. This call to action emerged from a high-level session on April 1, held during the 58th Session of the Economic Commission for Africa’s Conference of African Ministers of Finance, Planning, and Economic Development. The session was themed “Financing for Innovation: The Role of African Multilateral Financial Institutions in Accelerating Africa’s Technological and Economic Transformation.”
The Need for Structured Financing
The gathering brought together senior representatives from various sectors to discuss mobilizing long-term, affordable capital for essential areas such as digital infrastructure, artificial intelligence, and innovation-led sectors. These areas are vital for enhancing productivity, job creation, and structural transformation across Africa. Despite the rapid growth of the continent’s digital economy, access to affordable financing remains a significant barrier.
Participants highlighted that high capital costs, limited risk-sharing mechanisms, and insufficient early-stage financing are major impediments to investment in digital infrastructure and innovation ecosystems. These issues are exacerbated by gaps in project preparation and a scarcity of bankable investment opportunities.
Hanan Morsy, Deputy Executive Secretary (Programme) and Chief Economist at the United Nations Economic Commission for Africa, emphasized that Africa’s innovation challenge is not a lack of ideas but rather a deficiency in long-term, affordable, and well-structured financing. Addressing this issue is crucial for unlocking productivity and job creation across the continent.
Bridging the Capital Gap
The session underscored the disconnect between available capital and actual investments in innovation-driven sectors. Haytham Elmaayergi, Executive Vice President-Global Trade Bank at African Export-Import Bank, pointed out that the continent’s primary challenge lies not in the availability of capital but in the lack of bankable projects and the need for stronger institutional collaboration to scale investments.
Key priorities identified for unlocking large-scale financing include strengthening project preparation, improving pipeline development, and enhancing coordination among institutions. Participants also stressed the importance of adapting financing approaches through blended and risk-sharing structures. This would involve combining guarantees, advisory services, and capital mobilization to better align with the risk-return profiles of technology and innovation-driven sectors.
Adeniran Aderogba, President and CEO of the Regional Maritime Development Bank, noted that the technology sector presents unique challenges in structuring risk. He called for more creative financing models and dedicated funds to support early-stage innovation.
Expanding Financial Instruments
The discussion highlighted the necessity for tailored financial instruments, including blended finance and co-financing mechanisms, to support the entire lifecycle of innovation from early-stage development to scaling. It was also emphasized that financing innovation must go hand in hand with investments in enabling infrastructure and systems.
Robert Lisinge, Director of Technology, Innovation, Connectivity, and Infrastructure at ECA, remarked that technology and innovation extend beyond digital realms. A broader ecosystem, including infrastructure, energy, and emerging technologies, requires significant investment.
Participants stressed the importance of strengthening regulatory frameworks, digital infrastructure, and innovation ecosystems to facilitate scalable and sustainable investments. The session concluded with a strong call to move beyond traditional financing methods toward more coordinated and practical solutions that can:
- Reduce financing costs for digital and innovation sectors
- Expand risk-sharing and co-financing mechanisms
- Strengthen project preparation and pipeline development
- Mobilize long-term capital at scale
- Enhance collaboration among African institutions and partners
AAMFI’s Role in Financial Architecture
The session was organized by the Alliance of African Multilateral Financial Institutions (AAMFI) and its partners, part of ongoing efforts to fortify Africa’s financial architecture. AAMFI aims to position African multilateral financial institutions at the forefront of financing the continent’s digital and economic transformation.
AAMFI, also known as the Africa Club, was established to advance the interests of its member states in global finance and promote coordinated African solutions to development financing challenges. Launched on February 17, 2024, in Addis Ababa, Ethiopia, during the African Union Summit, AAMFI seeks to enhance collaboration among its members in support of Africa’s sustainable development and integration objectives.
The alliance includes leading African financial institutions such as the Africa Finance Corporation (AFC), African Export-Import Bank (Afreximbank), Trade and Development Bank Group (TDB Group), and others. Collectively, AAMFI members manage a balance sheet exceeding US$70 billion, providing critical financing for trade, infrastructure, and development across the continent.
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