Africa’s Financial Sovereignty Begins with Lowering the Cost of Capital

Africa’s next phase of growth will not be determined only by the scale of its opportunity, but by the terms on which it can finance that opportunity.

Across the continent, governments and businesses are working to build infrastructure, expand industry, create jobs, deepen digital systems, and serve a rapidly growing population. Too often, the capital required to fund this transformation is priced beyond the realities of African markets.

As a result, Africa pays more to finance its development, even where the underlying opportunities are substantial and the long-term fundamentals are strong.

This is why the question of Africa’s cost of capital must now be understood as a question of financial sovereignty.

Financial sovereignty does not mean turning away from global capital. It means ensuring that African economies, institutions, and markets have the credibility, depth and coordination required to mobilise capital on terms that reflect their real value and potential. It means reducing the extent to which Africa’s development is constrained by external risk assumptions, fragmented markets and financial architectures that do not always price the continent accurately.

This was the central message I delivered in my capacity as Chairman of Access Holdings PLC and President of the France Nigeria Business Council (FNBC) at the Africa Forward Summit 2026, held recently in Nairobi, Kenya. Convened by President William Ruto and attended by 18 African Heads of State, including President Bola Ahmed Tinubu, as well as French President Emmanuel Macron and leading global investors, the summit reflected a growing consensus: Africa is central to the future of the global economy.

The continent is no longer on the margins of global change; it is at the centre of it. With its demographic momentum, expanding markets, and increasing strategic relevance, Africa has the foundational ingredients to shape global growth over the coming decades. Despite this promise, one structural constraint continues to undermine its progress: the disproportionately high cost of capital.

This is a systemic challenge, not an abstract financial issue that acts, in effect, as a tax on Africa’s development.

Across the continent, sovereigns and corporates routinely borrow at rates between 4% and 15% above U.S. Treasury benchmarks, with stressed conditions driving that premium even higher. These are not marginal differences. They are penalties imposed on economies seeking to build infrastructure, industrialise, and create jobs.

As I noted at the summit, this premium is not a tax paid into African treasuries. It is a tax exported into global financial markets, a cost borne by African economies but captured elsewhere. Capital that should be building roads, power systems, factories, and digital infrastructure is instead consumed by the sheer cost of accessing finance, diluting the potential to advance Africa’s development.

A Structural Constraint on Growth

No region can achieve sustained economic transformation when a significant share of its resources is diverted into servicing expensive capital.

For Africa, the challenge is particularly acute. The continent requires substantial long-term investment to close infrastructure gaps, accelerate industrialisation, and support its rapidly growing population. Still, the very capital needed to finance this transformation is constrained by the way Africa is priced.

This distortion creates a structural disadvantage. It weakens competitiveness, discourages investment, and raises the threshold for viable economic activity. While large corporations may be able to absorb these costs, small and medium-sized enterprises, the backbone of African economies, cannot.

The consequence is a cycle that limits entrepreneurship, constrains innovation, and slows growth.

While African ambition remains high, the financial terms available to governments, businesses and entrepreneurs limit the speed and scale at which that ambition can be converted into growth.

Risk Perception Versus Economic Reality

At the heart of this issue lies a fundamental misalignment between perception and reality.

Africa is often treated as a homogeneous high-risk environment, despite vast differences in economic fundamentals across countries and sectors. This broad-brush approach results in an aggregated risk premium that does not always reflect actual performance or resilience.

More striking still is that this perception is internalised within the continent itself. African institutions, including pension funds and investors, often price domestic opportunities through the same lens, reinforcing the very constraints that limit growth.

Addressing the risk premium, therefore, is not simply about reducing interest rates. It is about reshaping the frameworks through which Africa is assessed, financed, and evaluated. Reclaiming financial sovereignty therefore begins with reclaiming the way African risk is understood. It requires better data, stronger institutions, deeper domestic markets and a more disciplined investment narrative that reflects performance rather than prejudice.

Lowering the Cost of Capital: An Urgent Priority

Reducing Africa’s risk premium must be treated as one of the continent’s most urgent economic priorities.

Even a modest improvement would have an outsized impact. A 2% reduction in financing costs across African markets would unlock billions of dollars in investable capital, expand fiscal space, and significantly improve the viability of long-term projects. It would allow governments to invest more in infrastructure, enable businesses to scale, and create pathways for inclusive growth.

In practical terms, lowering this premium would mean freeing Africa from the constraints that currently tie its hands, allowing it to compete on more equal terms in the global economy.

A Call for Coordinated Action

Achieving this will not happen organically. It requires deliberate, coordinated intervention.

Africa must move beyond fragmented responses and embrace structured collaboration between governments, private sector leaders, and development finance institutions. The objective should be to systematically reduce perceived and actual risks associated with investing in the continent.

This calls for practical mechanisms, including strengthening institutional credibility and policy consistency; building transparent, deep, and liquid financial markets; expanding the role of guarantees and blended finance instruments; enhancing data, ratings frameworks, and investor communication, and aligning public and private capital toward long-term investment.

A coordinated public-private platform focused on de-risking African investments would provide a structured pathway for achieving these outcomes at scale.

Success will rest not only redesigning the ‘plumbing’ of the continent’s financial architecture, but equally on the ‘plumbers’ who are leading the way.

Encouragingly, conversations among African leaders and global partners, including those at the Nairobi summit, suggest growing momentum toward building such institutional solutions. The priority now is execution.

Reframing Africa’s Investment Story

Ultimately, the challenge of Africa’s risk premium is also a question of narrative.

Africa must be seen, and must see itself, not as a collection of high-risk markets, but as a continent of opportunity with the scale, resilience, and potential to drive global growth.

This narrative must be underpinned by credible institutions, disciplined policy execution, and a shared commitment to long-term value creation.

As I emphasised at the summit, potential does not deliver transformation, execution does.

The Path Forward

Africa has already established its relevance in the global economy. The next phase is to ensure that this relevance translates into competitiveness, resilience, and sustained growth. Lowering the cost of capital is central to that objective.

If Africa can successfully reduce its risk premium, if it can remove this structural tax on development, it will unlock a new era of investment, accelerate industrialisation, and significantly expand economic opportunities across the continent.

This is not simply a financial adjustment. It is a strategic imperative for Africa to achieve financial sovereignty.

The continent cannot realise its full potential while its development is constrained by a risk premium that too often reflects perception more than performance. Lowering that premium is one of the most important economic tasks of our time. It is how Africa begins to convert relevance into competitiveness, potential into execution, and opportunity into shared prosperity.