Capital & Finance/Force / 02
The money exists.
The bankable project does not.
Capital is not the binding constraint on African infrastructure. Structure is.
The state of it/01
Where the
money sits.
Foreign direct investment into Sub-Saharan Africa ran at 43.5 billion dollars in 2024. Official development assistance was larger, at 64.8 billion in 2023. Gross fixed capital formation, which is what the region actually spends on building things, reached 508 billion dollars in 2025.
So the region is investing. The question is who is doing it and on what terms.
Domestic banking is going the wrong way. Credit to the private sector fell to 29.4 percent of GDP, down from 39.8 percent in 2018. Banks have been lending to governments instead, because sovereign paper pays well and needs no project appraisal.
That is the quiet crisis. A contractor who could build cannot borrow, while the bank next door earns more holding treasury bills.
What decides it/02
What decides
whether it closes.
A project finances when each risk sits with the party best able to price and absorb it. Construction risk to the contractor. Demand risk to whoever influences demand. Currency risk to whoever earns in that currency.
Deals fail when risk is pushed onto a party that cannot price it. The lender then charges for the confusion, and the tariff no longer works.
A project that earns in local currency is strongest when it is funded in it. African pension funds and insurers now hold the largest domestic savings pools the continent has ever had, and they are looking for long assets that match long liabilities. Infrastructure is exactly that asset.
This single mismatch has killed more African projects than any construction fault. Local-currency debt, even at a higher headline rate, is often the cheaper instrument once this is priced honestly.
Development finance institutions bring long tenors and patience, which are genuinely scarce. They also bring appraisal cycles measured in years and conditions that reshape the project.
Sponsors who plan around that timetable use it well. Sponsors who need money this quarter should not be at that door.
Announced project value is not pipeline. A great deal of what is announced has no feasibility study, no land, and no offtake agreement.
The scarce good is a project prepared to the point where a lender can say yes. Project preparation is unglamorous, underfunded, and the actual bottleneck.
What it means/03
Capital follows
structure.
It has never been true that Africa cannot raise money. What has been missing is the structure that makes a good project fundable, and that is a solvable problem. Every deal that closes teaches the next one how.
The Brief/
The NextStep Africa
Brief.
What the engine turns up, every fortnight. From Lagos.
- What moved
- The change that mattered, and the number under it.
- How it connects
- The systems involved, and what one does to another.
- What it turns on
- What has to go right, and who is already building it.
- What to watch
- One indicator, and when it resolves.
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From the founder's desk.
NextStep Africa / Lagos