Africa's capital deficit

RESILIENCE: REAL GDP GROWTH IS EXPECTED TO RISE TO 4.3% IN 2025

- Rajesh Ramsundhar

Africa's economic potential is undeniable, but to fully realise it, the continent faces a massive need for capital. With an annual financing gap of approximately $100 billion (about R1.8 trillion) for infrastructure and a climate finance shortfall of $213.4 billion through 2030, this demand is vast and urgent.

On top of this, achieving the UN Sustainable Development Goals by 2030 is estimated to cost Africa $1.3 trillion annually - equivalent to 42% of the continent's GDP. What these figures make clear is that Africa needs capital to drive transformation, development, and ultimately, economic growth.

Despite these challenges, Africa's resilience stands out. Economic projections show real GDP growth will rise to 3.7% in 2024 and 4.3% in 2025, continuing to outperform global averages.

This resilience opens new opportunities for investors and highlights the region's potential as a source of yield, especially as global investors seek assets in emerging markets.

While growth in Africa's insurance markets - valued at $87.4 billion in 2023 and expected to grow to $153.9 billion by 2032, according to the IMARC Group - creates pools of capital, these funds must be directed toward tangible investments.