Africa Faces Urgent Call to Rethink Infrastructure Financing

Africa needs to urgently bridge an infrastructure financing gap estimated between $130 billion and $170 billion each year, or risk continued economic slowdown and declining productivity across the continent.

That was the key message delivered on July 9, 2025, by Ridhiwani Kikwete, Tanzania’s Minister of State in the Prime Minister’s Office responsible for Labour, Youth, Employment, and Persons with Disabilities. He was speaking at the Africa Social Security Association (ASSA) Leadership Forum held in Dar es Salaam ahead of the association’s 14th international conference.

“Infrastructure is more than bricks and mortar—it’s the backbone of economic transformation,” said Mr. Kikwete, quoting figures from the African Development Bank (AfDB). “But unless we find innovative financing models, we will keep falling short of our development potential.”

The infrastructure deficit, which spans sectors like energy, transport, water access, and digital connectivity, is said to shave off around 2% of Africa’s GDP annually and diminish overall productivity by as much as 40%, affecting both urban growth and rural livelihoods.

“This is not just about mega projects,” Kikwete emphasized. “Lack of reliable roads, power, and internet affects farmers, students, traders, and job seekers every single day.”

He also highlighted that while Africa is home to more than 1.4 billion people, many still live without access to stable infrastructure, stalling efforts toward achieving the UN Sustainable Development Goals (SDGs) and the African Union Agenda 2063.

Mr. Kikwete called on African governments to better utilize social security funds, pension schemes, and insurance pools as tools for national development. In many African countries, these funds are vast yet underutilized, often invested in low-yield government bonds or foreign assets.

He argued for greater engagement between public institutions and private sector investors to support public-private partnerships (PPPs)—financial arrangements proven effective in countries like South Africa, Nigeria, and Kenya.

“These partnerships aren’t just about funding projects,” he said. “They create ownership, accountability, and shared prosperity.”

Also Read; Over 2,900 Journalists Digitally Accredited Across Nation

For example, pension funds in Kenya have financed toll roads and energy plants, while in Ghana and Nigeria, housing schemes are now supported by national insurance funds.

Kikwete also stressed that addressing the infrastructure gap is about more than raising capital. It involves good governance, transparent procurement, and skilled labour—areas where countries must invest in institutional capacity. He encouraged knowledge-sharing among African states through forums like the upcoming 14th ASSA International Conference.

The conference, which gathers delegates from across the continent, will explore risk mitigation, long-term investment frameworks, and how social security bodies can balance profit motives with social protection goals.

Kikwete’s message resonated with attendees: Africa’s development path is being shaped now, and failing to act on infrastructure challenges could widen inequality and delay economic independence.