Infrastructure can be the engine that powers Africa’s economic transformation and helps it achieve the ambitions of Agenda 2063. By increasing annual investments from USD 83 to USD 155 billion, the continent could double its total GDP by 2040. To achieve this in the face of pervasive financial constraints, policymakers should prioritise the highest-return infrastructure projects, foster stronger public-private partnerships, gather investment data, and better manage social and ecological risks.
Africa's Development Dynamics 2025
Infrastructure, Growth and Transformation
Introduction
Key figures
USD 155 bln
The amount of annual infrastructure investment that could double Africa’s GDP by 2040
20%
The potential return on investment in African infrastructure projects
7x
How much African governments spend on debt servicing vs. infrastructure
More infrastructure investment is key to Africa’s growth and transformation
Africa could double its GDP before 2040 by raising annual infrastructure investments to USD 155 billion (representing 5.6% of its GDP in 2024). This could accelerate growth by 4.5 percentage points per year, enough to exceed the African Union’s Agenda 2063 objective of 7% growth and achieve the same level of transformation as the best-performing economies around the world with otherwise similar profiles. As a proportion of their wealth, African economies would need to invest on average three times more than Latin America and the Caribbean (LAC) and five times more than developing Asia. But the economic returns for Africa would be three times higher than for the LAC region, and nine times higher than for developing Asia.
African governments face increasing financial constraints
Governments account for 41% of Africa’s infrastructure spending, but fiscal constraints and rising debt are straining public budgets. From 2019 to 2023, African governments spent an average of seven times more servicing debt than on infrastructure; 15 countries spent more on debt interest than on infrastructure. And yet African governments are set to remain the major driving force for bridging the continent’s infrastructure investment gap, as the outlook for other sources of finance remains uncertain.
An uncertain outlook for official development funding
Bilateral and multilateral development partners fund nearly half (48%) of Africa’s infrastructure investment. Official development finance increased from USD 10 billion to nearly USD 15 billion between 2010 and 2023, while disbursements from development banks doubled over the period, from USD 4.2 to 8.2 billion. However, future support is uncertain: official development assistance is projected to fall by as much as 17% in 2025, following a 9% drop in 2024. African countries with the lowest human development levels are likely to be the most affected by those cuts. Even China, whose Belt and Road Initiative, launched in 2013, contributed to the rapid development of large-scale infrastructure projects on the continent, has been reducing its development finance commitments to Africa’s infrastructure since 2016.
What can governments do?
Dedicated public-private partnerships can help lower costs and strengthen divisions of labour. Greater cost recovery and planning for maintenance of existing infrastructure can support long-term sustainability. Stronger coordination across different levels of government, and greater technical and managerial capacity and skills, are essential.
Strengthen regulatory frameworks, improve the availability of reliable data on investment opportunities and related policies, and signal the quality and bankability of projects, e.g. through the use of the PIDA Quality Label.
Policy design and implementation should better reflect and manage the vulnerabilities caused by climate change and social risks, including pollution, biodiversity loss, population growth, and the exclusion of rural populations and women.
