Financing the next stage of Africa’s growth

Africa's abundant natural resources, young population and expanding middle class are set to redefine the continent's role in global economic growth, sustainable development and the energy transition, S&P Global said in its latest Look Forward Journal

Look Forward: Unlocking Africa brings together S&P Global research on the continent's economic outlook, highlighting how renewable energy, sustainable and blended finance, capital market development, and infrastructure investment are shaping Africa's future.

The report examines both the opportunities these innovations create for growth and the persistent challenges that continue to slow progress.

Highlights of this research include:

Unlocking Africa's economic potential for faster long-term growth: Faster economic growth is needed to increase upward mobility opportunities for Africa's rapidly expanding population, and the continent's vast critical mineral resources could offer a path to unlocking its economic potential.

The role of multilateral lending institutions in accelerating capital market development in Africa: Multilateral lending institutions provide financial, technical and policy support that can help to deepen Africa's capital markets and foster long-term economic growth.

Reinforcing private capital mobilisation in Africa through blended finance: Blended finance models are gaining momentum as a tool to mobilise private capital for Africa's climate and sustainable development goals, but challenges such as fragmented markets, regulatory hurdles and low investor appetite underscore the need for ongoing global collaboration.

Africa's energy transformation calls for innovative financing solutions: The continent's abundant natural resources offer transformative potential for renewable energy, but overcoming the financing gap will require innovative funding solutions and targeted policy support.

Breaking the mould: Institutional strategies for infrastructure success in Africa: Africa's infrastructure development hinges on robust governance, legal clarity and institutional capacity to mobilise capital and attract investment to address deficits.

Sustainable finance is growing in Africa, but volumes fall short of addressing needs: Although sustainable debt issuance in Africa is climbing, the volume remains insufficient to address critical development and infrastructure challenges, particularly in areas such as climate adaptation, water security and biodiversity preservation.

“Unlocking Africa's economic potential hinges on sustained global collaboration, as well its ability to harness human capital and natural resources while using new technologies to accelerate long-term sustainable development,” said Samira Mensah, managing director for Africa research and analytics at S&P Global Ratings.

“The continent stands at a crossroads, needing to accelerate regional integration through trade and industrialisation while leveraging the energy transition to improve access to transport, electricity, water and digital networks for its growing population.”

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