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Top ministers, economists, and business leaders chart bold reforms to end “prejudice premium” costing the continent $75bn annually.
African leaders, finance ministers, and private sector heavyweights have unveiled an ambitious three-year action plan to cut the crippling cost of capital that has long stifled the continent’s growth.
The strategy born out of the Financing Africa Forward Summit held in Johannesburg and co-hosted by Standard Bank and Africa Practice, with support from the ONE Campaign and the African Peer Review Mechanism aims to deliver reforms within 12 to 36 months.
At the heart of the plan is a determination to challenge what participants described as a “prejudice premium”, the inflated borrowing costs driven by outdated risk perceptions. Samaila Zubairu, President and CEO of the Africa Finance Corporation, revealed that this bias costs African nations $75 billion every year in extra interest payments and lost revenues. "Affordable capital is a lifeline for Africa, not a luxury,” said Ndidi Nwuneli, CEO of the ONE Campaign. “It’s time the cost of capital reflects our potential, not outdated risk narratives.”
According to the summit data, African countries often pay up to 500% more for capital market loans compared to rates from Multilateral Development Banks. With external debt servicing projected at $89 billion in 2024, more money is flowing out in repayments than is entering through new financing and aid.
Four pillars will drive the initiative:
Reforming the global financial architecture to amplify Africa’s voice in setting international rules and creating fairer systems.
Strengthening government capacity to make strategic investments, reduce borrowing dependence, and boost development spending.
Shaping markets to reward innovation and support domestic capital growth.
Improving financial data and narratives to replace the image of Africa as a “risk and assistance” zone with one of “opportunity and investment.”
Marcus Courage, CEO of Africa Practice, likened the challenge to climbing a mountain with unnecessary weight: “Some nations get harnesses for the climb, while African countries must scale the mountain with weighted vests. That must change.”
Sim Tshabalala, CEO of Standard Bank Group, emphasised the wider benefits: “This is not just about building roads and bridges; it’s about building opportunity, resilience, and prosperity.”
The plan will be spearheaded by a coalition of African institutions and actors, ensuring solutions are self-determined, context-specific, and aligned with long-term priorities. Leaders left the summit with a united message: Africa will no longer wait for external approval to claim its economic sovereignty.
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