Africa Leaders Back New Financial Plan to Unlock Investment and Create Jobs
The African Development Bank Group has secured strong political backing for its proposed New African Financial Architecture for Development (NAFAD) during the Africa Forward Summit held in Nairobi, Kenya.
The summit, jointly hosted by Kenyan President William Ruto and French President Emmanuel Macron, brought together African leaders, development institutions, investors, and private sector representatives to discuss new approaches to financing Africa’s development and economic transformation.
Central to the discussions was a proposed pan-African guarantee mechanism aimed at unlocking investment, lowering the cost of capital, and accelerating job creation across the continent.
Speaking during the summit, African Development Bank Group President Sidi Ould Tah described NAFAD as an African-led solution designed to address structural barriers preventing investment from flowing into the continent.
Dr Ould Tah stated that Africa’s major challenge was not the absence of capital, but the lack of mechanisms capable of transforming investment risks and attracting long-term financing.
He noted that although Africa faces an annual development financing gap of more than US$400 billion, the continent holds nearly US$4 trillion in domestic savings.
However, Africa currently attracts only one percent of global institutional capital and approximately four percent of global foreign direct investment.
Dr Ould Tah further highlighted that between 12 and 15 million young Africans enter the labour market annually, while only around three million formal jobs are created each year.
According to the African Development Bank Group President, the continent faces an annual guarantee and insurance gap estimated at between US$40 billion and US$50 billion, which continues to limit large-scale investments.
The summit also marked progress towards operationalising NAFAD, which had earlier received endorsement from African Heads of State during the African Union Summit and through the Abidjan Consensus adopted last month.
Under the framework, the African Development Bank Group intends to use its financial strength and partnerships to support African financial institutions capable of mobilising investment at scale.
At the centre of the initiative is African Trade and Investment Development Insurance (ATIDI), which has been identified as the flagship institution to anchor Africa’s continental guarantee system.
President Ruto called for the recapitalisation of ATIDI, describing it as a critical pillar of Africa’s new financial architecture and stressing the importance of stronger African-led financing systems.
President Macron also announced France’s intention to support the expansion of ATIDI and endorsed the development of a continental first-loss guarantee strategy centred around the Nairobi-based institution.
Meanwhile, António Guterres praised African leadership in advancing reforms to the global financial system and commended the African Development Bank Group for mobilising African resources to support African priorities.
Discussions during the summit reflected growing consensus that Africa’s development model must increasingly shift away from reliance on traditional aid towards investment-driven partnerships capable of mobilising domestic savings, strengthening local capital markets, and supporting infrastructure, energy, industrialisation, and job creation.
Dr Ould Tah stressed that NAFAD is not a new institution but a coordination framework designed to align African and international financial actors around shared principles of coordination, complementarity, and disciplined risk transformation.
