Africa is brimming with human talent and natural riches, yet constantly held back by borrowing costs that are several times higher than those in wealthier nations.
By lowering sovereign borrowing costs, we can transform a cycle of debt into a virtuous cycle of development. Reduced capital costs will enable greater investment in crucial infrastructure, lower operational expenses for businesses, boost productivity, and create much-needed jobs.
Potential annual savings in financing costs for African countries with more objective credit ratings.
More that African governments pay to borrow from capital markets versus MDBs like the World Bank.
The average premium paid on coupon payments by sub-Saharan African countries compared to peers.
The inflated cost of capital forces governments to divert scarce resources away from critical public services, creating a vicious cycle of underinvestment and inflated risk perception.
The high cost of capital is a solvable crisis. It is a product of the dysfunctional interplay between domestic challenges and a global financial architecture that applies risk assessment methodologies designed for developed markets, not emerging and developing economies. It is rooted in:
Outdated global narratives frame Africa as a continent of “risk and assistance”, rather than “opportunity and investment,” creating a self-fulfilling prophecy of high capital costs despite evidence to the contrary.
A perceived and real paucity of data, which allows subjective, and often biased, credit rating assessments to persist, directly contributing to the risk premium African borrowers are forced to pay.
Many African governments’ lack of specialised functions and resources to manage their investor relations, maintaining a proactive, two-way dialogue.
Fragmented efforts by institutions—many actors are working on this issue, but the absence of a coordinated, high-level approach has hindered progress, preventing systemic change.
As an outcome of the 2025 Financing Africa Forward Summit in Johannesburg, a collective was launched to drive a concrete, African-led blueprint for action. This collective unites African and global leaders with the express purpose of dismantling the barriers that inflate capital costs for African borrowers.
This pillar focuses on strengthening the ability of African governments to manage their financial narratives and engage with global markets from a position of strength. The initiatives are designed to improve two-way dialogue with creditors and credit rating agencies, enhance transparency, and ensure consistency in economic management to build market confidence.
This pillar aims to unlock domestic institutional capital for local investment and create more efficient financial instruments. The work involves creating practical playbooks for mobilising funds from sources like pension funds, standardising blended finance tools to reduce transaction costs, and developing a model framework to accelerate sovereign debt restructuring..
This pillar is designed to counter subjective narratives with credible data and improve the transparency of risk assessments. Key initiatives include building an authoritative public data repository on investment returns, developing a common framework to benchmark the qualitative methodologies of credit rating agencies, and commissioning research that quantifies the developmental cost of the Africa prejudice premium.
This pillar aims to directly challenge and shift biased global perceptions of risk in Africa. The strategy is to move beyond anecdote and present a more balanced, data-driven understanding of the continent’s investment landscape. The work involves a concerted effort to amplify success stories and promote compelling evidence of returns to a global audience that includes media, investors, and opinion leaders. The ultimate goal is to foster a meaningful shift in sentiment that makes a dent in the cost of capital.
Every stakeholder has a crucial role to play in the success of Financing Africa Forward. We invite you to join our collective and contribute your expertise, resources, and influence to this transformative agenda.
Use your platforms to tell Africa’s success stories
Changing the story is as critical as changing the financial models. We invite you to:
Financing Africa Foward 