Why smart capital deployment is key in Africa’s growth

• At AfDB annual forum, policymakers note that Africa must roll out policies that enable its capital—both financial and human—to work better and harder for its development.
• Leaders note that success of Agenda 20263 depends on the continent’s ability in capital deployment, ensuring it effectively and addresses long-standing structural inefficiencies.
• To-date, infrastructure woes, fragmented financial markets, and joblessness among youth continue to undermine the continent’s growth.

Africa stands at the threshold of a new era — one defined not by its challenges but by the vastness of its opportunities. As the world’s youngest continent, home to a growing population projected to reach 2.5 billion by 2050, Africa is rich not just in demographics but in resources, innovation potential, and human capital.

Yet despite these inherent advantages, the continent’s transformation into a global growth engine has been inconsistent and, in many areas, underwhelming. The message emerging from the 2025 Annual Meetings of the African Development Bank (AfDB) Group, held in Abidjan, Côte d’Ivoire, is one of unlocking the continent’s its full potential.

But, to realize this, Africa must implement policies that enable its capital deployment —both financial and human—to work better and harder for its development.

Making capital deployment work better for Africa

Convened under the theme “Making Africa’s Capital Work Better for Africa’s Development,” the high-level meetings brought together heads of state, ministers, private sector leaders, and development experts. Central to the discussions was the African Union’s Agenda 2063 — the continent’s strategic framework for achieving inclusive and sustainable development over a 50-year horizon.

While the vision of Agenda 2063 is ambitious — encompassing economic integration, technological transformation, and socio-political stability — its success depends on the continent’s ability to deploy capital more effectively and address long-standing structural inefficiencies.

Speaking at a knowledge event on the Second Ten-Year Implementation Plan for Agenda 2063, Ivorian Minister of Vocational Training and Apprenticeships, Koffi N’Guessan, noted that while Africa has made undeniable progress over the past decade, particularly in areas such as gender equality and regional cooperation, the pace and scale of transformation have not kept up with the urgency of its development needs.

Persistent gaps in infrastructure, fragmented financial markets, and insufficient job creation for a burgeoning youth population continue to undermine the continent’s growth trajectory.

Policy frameworks that catalyze private investment

Africa’s development path cannot be left to chance or ideology alone—it requires deliberate policy frameworks that catalyze private investment, enhance cross-border capital flows, and create enabling environments for innovation and entrepreneurship.

Executives operating in or eyeing African markets must understand that their strategies will be more impactful when aligned with continental priorities such as the African Continental Free Trade Area (AfCFTA), green industrialization, and inclusive finance.

“The second Agenda 2063 implementation plan, adopted in February 2024 by the African Union, offers a crucial opportunity to tackle these challenges and accelerate development outcomes,” Koffi N’Guessan said.

According to the Ivorian Minister, Africa is poised to become a major global power, alongside China and India, due to its demographic potential. However, he stressed that African countries should prioritize vocational and technical training to fully harness this demographic dividend.

He highlighted a worrying trend: approximately 22.5 per cent of young people aged 15 to 24 are unemployed with no education or training. Additionally, 250 million children and young people in low-income countries are not in school, underlining the disconnect between education systems and labor market needs.

“Youth can become a liability if robust training policies are not implemented – from nursery school through to university,” he warned.

Taking natural capital into account assessing GDP

Hervé Lohouès, Division Manager in the Country Economics Department at the African Development Bank, highlighted the importance of natural wealth in calculating the GDP of African countries.

“The GDP of a country like the Central African Republic would increase by 300 per cent if its natural resources were taken into account in the calculation of its GDP,” he asserted.

He added: “It is essential to go beyond natural enhancement and ensure that all African countries adopt a compulsory development plan. We also need to ensure that governments provide incentives for transformation while considering accountability that can directly help the transition from natural to social infrastructure.”

Jide Okeke, Regional Program Coordinator for Africa at the United Nations Development Programme, and Dagmawit Moges Bekele, former Eritrean Minister of Transport and Director of the Peace Fund at the African Union Commission, both stressed the need to leverage human, financial, natural and digital resources to drive inclusive and sustainable development — key to achieving the objectives outlined in the second decade of Agenda 2063.

Read also: Africa Day: From post-independence unity to Agenda 2063