Africa continues to generate some of the strongest potential returns in the global infrastructure market with certain projects delivering yields of up to 20 percent.
Despite this attractive performance, private investment across the continent remains limited, according to a new assessment released by the Organisation for Economic Co-operation and Development (OECD) in collaboration with the African Union Commission.
The OECD’s latest publication, Africa’s Development Dynamics 2025, shows that private capital accounts for only 11 percent of Africa’s total infrastructure financing.
This stands in sharp contrast to the continent’s high-return profile, which surpasses several emerging and developed economies.
The gap between opportunity and actual private-sector participation continues to widen, reinforcing concerns about Africa’s ability to meet future infrastructure needs and sustain long-term growth.
The report attributes the low investment levels to a mix of regulatory uncertainty, project-preparation challenges, limited reliable data, and macroeconomic volatility.
These structural factors have kept many investors on the sidelines even as infrastructure demand rises and available returns remain globally competitive.
Governments across Africa currently shoulder 41 percent of infrastructure financing, but mounting fiscal pressures are narrowing their capacity to invest. Between 2019 and 2023, governments spent seven times more servicing debt than building infrastructure, diverting resources away from development priorities.
Development partners provide another 48 percent of available financing, yet official development assistance to the region is projected to decline sharply over the next two years, with the steepest reductions expected in sub-Saharan Africa.
The OECD highlights that scaling private investment is essential to closing Africa’s infrastructure gap.
It recommends policy actions that would help unlock new capital flows, including stronger regulatory frameworks, improved governance, better-functioning public-private partnership models, and enhanced national and regional planning alignment.
It also emphasises the importance of expanding access to reliable project and economic data to help investors identify viable opportunities and assign appropriate risk premiums.
Environmental and social safeguards must also be integrated more systematically into planning to meet global investment standards.
The report concludes that Africa offers one of the most attractive long-term infrastructure investment frontiers in the world.
However, unless private capital is mobilised at a much greater scale, the continent risks missing a historic opportunity to accelerate economic transformation, improve competitiveness, reduce trade costs, and meet the African Union’s Agenda 2063 growth ambitions.