CAMBRIDGE – African economies will not be able to meet their development goals unless they can mobilize their own resources. But to do that, policymakers must confront a fundamental question: Where are the investment platforms that are needed to effectively channel domestic savings into productive investment?
Africa’s problem is not a shortage of savings. Across the continent, pension funds, insurers, sovereign wealth funds and banks already hold about $1 trillion in long-term capital, and those pools are growing steadily. Nor is it a lack of appetite: African institutional investors would welcome credible, well-structured opportunities to invest at home.
What is missing are the pathways that connect savings to productive investment. Without them, capital gravitates toward the simplest instruments available. In most African markets, that means short-term sovereign bonds. However ambitious investors may be, their options remain limited by the financial architecture.
