Agenda 2063 envisages Africa’s development being financed primarily through domestic resources, yet Africa’s average tax-to-GDP ratio (16.5 per cent) remains less than half the OECD average, highlighting a persistent revenue gap[1]. Therefore, strengthening taxation systems is central to advancing Agenda 2063. Discussions noted that taxation is not only a fiscal instrument but also a political one, essential to building trust between citizens and the state through stronger tax administration, transparency, and sound fiscal governance. SMEs, particularly those led by women and youth, were also highlighted as critical to domestic resource mobilisation, formalisation, and tax base expansion, while generating important dividends in employment, health, and education.
Beyond taxation, enabling greater and more affordable access to capital for national development priorities will be equally critical. Recent analysis by the Africa Finance Corporation (AFC) underscores that Africa’s core challenge is not a lack of capital, but the ineffective mobilisation and deployment of existing financial resources. Domestic capital pools now exceed USD 4 trillion, including USD 2.5 trillion in banking assets and USD 1.7 trillion held by pensions, insurance funds, development banks, and sovereign wealth funds[2]. Yet these institutional savings remain highly concentrated and conservatively allocated, with the majority invested in government securities, money-market instruments, and real estate, crowding out long-term investment in infrastructure, industrialisation, and productive sectors.
The principal constraint to more effective mobilisation of this capital lies in weak financial intermediation, driven by regulatory rigidity, shallow capital markets, limited pipelines of bankable projects, and institutional capacity gaps. Experiences from Nigeria (InfraCredit) and Namibia (Regulation 29) demonstrate that targeted regulatory reforms, credit enhancement mechanisms, and de-risking instruments can help unlock institutional capital at scale without imposing prescriptive allocation mandates. Strengthened regional financial mechanisms and specialised investment vehicles for strategic value chains were also identified as promising avenues for mobilising long-term capital.
Participants further emphasised the importance of retaining and recycling capital within the continent. This includes deeper domestication of pension funds, more strategic use of foreign exchange reserves, and responsible frameworks for the extraction, value addition, certification, and reinvestment of critical and contentious minerals. Financing structures and ownership arrangements were recognised as decisive in determining developmental impact, alongside increased investment in supply chain resilience. Finally, discussions highlighted the continued importance of informal and community-based financial systems. Participants pointed to informal savings mechanisms, community finance networks, rotating savings groups, and broader forms of social capital as integral components of Africa’s financial ecosystem. These systems were viewed not merely as transitional arrangements but as enduring and structurally significant features of the continent’s financial landscape.
[1] Organisation for Economic Co-operation and Development, African Tax Administration Forum, & United Nations Development Programme. (2025). ‘Revenue statistics in Africa 2025’. https://www.oecd.org/en/publications/revenue-statistics-in-africa-2025_d880cbe4.html.
[2] Africa Finance Corporation (AFC). (2025, October). ‘Unlocking Africa’s Wealth: Catalyzing Domestic Capital Pools for Strategic Investments in Resource Industrialization’. Presented at the 6th Chief Sovereign Strategy (CSS) Forum.