This house believes: Africa must finance its own future through pension fund mobilisation and strategic regional integration

As we step into 2026, we reflect on one issue that dominated African policy discourse throughout 2025: financing the continent’s development in an era of declining external support. This was the central theme of the Mo Ibrahim Foundation’s 2025 Ibrahim Governance Weekend in Marrakech, where African leaders, policymakers, and development experts confronted an uncomfortable truth, the age of aid dependency is definitively over. 

The year 2025 witnessed unprecedented aid cuts that sent shockwaves across the continent. The United States slashed foreign assistance by 38%, Germany reduced development aid by €3 billion, and France implemented an 18.6% budget cut to its development assistance program. Africa’s share of Official Development Assistance plummeted from 37.6% in 2013 to 26.7% in 2023. Meanwhile, the continent faces astronomical financing needs: $1.3 trillion annually to achieve the Sustainable Development Goals and an additional $2.8 trillion by 2030 for climate adaptation alone. Africa receives less than 3% of global climate finance despite bearing disproportionate climate burdens while contributing less than 4% of global emissions. 

The twin crises of fiscal strain and external financing withdrawal forced African nations to confront the paradox at the heart of the continent’s development challenge. With an average debt-to-GDP ratio of 68.6%, several countries now spend more on debt servicing than on healthcare and education combined. Countries like Ghana, Zambia, and Ethiopia have defaulted on loan agreements, while others face severe debt distress. Undoubtedly, the era of looking outward for solutions has reached its inevitable conclusion.

Against this backdrop, the Mo Ibrahim Foundation’s Now Generation Network (NGN), a pan-African community of young leaders across the continent committed to advancing African governance and development convened throughout 2025 to deliberate on the continent’s financing future. Through a series of rigorous debates from January through the Ibrahim Governance Weekend in Marrakech, and beyond, NGN members wrestled with fundamental questions: Must Africa prioritise domestic resource mobilisation over external financing? Should African nations embrace transactionalism to survive the evolving global order? How can the continent finance its own activities and development priorities? 

As we reflect on the just-ended year, we recap the transformative resolution that emerged from the deliberations of the Now Generation Network, a resolution that charts a practical pathway from external dependency to domestic resource sovereignty. 

The Argument is not new - but the approach is 

To be clear, calls for African self-financing are not novel. For decades, scholars, activists, and policymakers have championed economic sovereignty, domestic resource mobilisation, and reduced aid dependency. Pan-Africanist thinkers from Kwame Nkrumah to Samir Amin have articulated visions of continental economic independence. Recent initiatives like the African Continental Free Trade Area (AfCFTA) and Africa50 represent important steps toward this vision. 

What makes the NGN proposition unique is not its ideological orientation but its surgical specificity and operational realism. Unlike broad declarations about “African ownership” or “resource mobilisation”, our resolution identifies the exact pools of capital, the precise institutional mechanisms, the specific regulatory reforms, and the detailed risk mitigation strategies needed to transform aspiration into implementation. 

The NGN resolution rests on a simple but powerful insight: Africa is not capital-poor, it is capital-misallocated. The continent possesses nearly $1 trillion in annual domestic financial resources including an estimated $220 billion in pension fund assets, $130 billion in sovereign wealth funds, $90 billion in remittances, and $480 billion in tax revenue. Yet these resources flow everywhere except where they are most needed, continental infrastructure, regional integration, and productive industrialisation. Meanwhile, illicit financial flows drain $88 billion yearly, while debt servicing was predicted to have consumed $89 billion in 2025. 

Unlocking Africa’s Pension Fund Assets

Our proposition addresses Africa's single largest pool of investible capital: pension funds. We propose mandating a 5-10% allocation by pension funds sourcing their capital from the continent’s workers to infrastructure, telecommunications, and regional integration projects through comprehensive regulatory reforms that transform passive savings into active sources of development financing. 

This proposition stems from what we call evidence-based policy transplantation. The UK’s 2023 Mansion House Accord committed British pension funds to allocating 10% of assets to unlisted equity by 2030, unlocking £50 billion for growth companies and infrastructure. Australia’s superannuation system, with over AUD $3.5 trillion in assets, allocates 8-12% to infrastructure, generating stable returns while funding critical national projects. Even within Africa, Nigeria’s Pension Reform Act has successfully channeled funds into infrastructure bonds and real estate, demonstrating feasibility within African regulatory contexts. We propose the continent adopts a similar set of reforms to unlock pension fund assets for regional and continental development. 

What distinguishes our approach is comprehensive risk mitigation architecture. We propose structured liquidity windows providing 3-5% annual payouts during infrastructure projects' early phases, ensuring pension funds can meet short-term obligations while maintaining long-term investment positions. We advocate funds invest into local currency-denominated infrastructure bonds backed by guarantees and structured with technical support from the African Development Bank, World Bank, and Africa50, reducing foreign exchange exposure that has historically deterred domestic institutional investment. A continental guarantee facility, initially capitalised at $2 billion, will provide partial risk guarantees for qualifying infrastructure projects. 

Crucially, we recognise that formal sector pension funds represent only a fraction of Africa's workforce. With over 83% of African workers in the informal sector, approximately 400 million people largely excluded from formal pension systems, we propose scaling micro-pension schemes modeled after Ghana’s successful Cocoa Farmers Pension Scheme, which covers over 1 million farmers. By targeting 20 million informal workers (prioritizing 50% women participation) by 2030, we will simultaneously expand the pension capital base while promoting financial inclusion and social protection. 

The transformative potential of these reforms is staggering. By 2030, successful implementation could unlock $100-150 billion in infrastructure investment and create 2-3 million jobs. By 2050, when Africa’s pension assets reach an estimated $7.3 trillion, strategic allocation could bridge 50% of the continent’s infrastructure financing gap while ensuring dignified retirement for millions of African workers. 

Operationalizing Continental Integration: The Pan-African Trade and Investment Growth Fund: 

Our second proposition establishes a Pan-African blended finance facility designed to operationalise AfCFTA and catalyze industrial transformation. This is what we call the Pan-African Trade and Investment Growth Fund. This fund pools a significant percentage of pension fund assets discussed above alongside diaspora bonds, SME crowd-investment platforms, and expanded sovereign wealth funds, creating a comprehensive financing ecosystem administered by the African Development Bank, Africa50, and the AfCFTA Secretariat. 

The Fund addresses a critical gap - AfCFTA exists as a policy framework, but implementation requires massive capital injections for trade facilitation infrastructure, regulatory harmonisation, and industrial capacity building. Current intra-African trade stands at just 16%, compared to 70% in Europe and 60% in Asia. This is not because Africans lack entrepreneurial spirit or market demand, but because prohibitive transaction costs, fragmented regulatory systems, and inadequate logistics infrastructure make cross-border trade economically unviable for all but the largest corporations. 

Our Fund will prioritise investments into four strategic pillars: 

1.Legal and institutional reform to strengthen state capacity through merit-based recruitment systems, tax modernisation frameworks that expand Africa's tax-to-GDP ratio from 16% toward the OECD benchmark of 34%, and judicial independence mechanisms that protect property rights and provide reliable commercial dispute resolution. 

2.Trade facilitation to ensure full AfCFTA domestication by 2026, including continent-wide digital single window trade systems, Pan-African digital identity for business registration and cross-border commerce, blockchain-based trade finance for SMEs, and regional transport corridors connecting landlocked countries to ports. 

3.Industrialisation and value chain development prioritizing agro-processing revolution (transforming Africa from a continent that produces $81 billion in food but imports $78 billion), green manufacturing positioning Africa as a global leader in clean technology production, and ICT expansion to capture the growing digital economy. 

4.Innovative financing architecture systematically mobilizing diaspora bonds for specific infrastructure projects, SME crowd-investment platforms enabling $50-100 minimum investments accessible to middle-class African investors and expanded sovereign wealth funds modeled after Rwanda's Agaciro Development Fund. 

The Fund's projected impact is ambitious but achievable: mobilise $55-110 billion by 2028, fund 50 Priority Infrastructure Development in Africa (PIDA) projects, create 1.5 million jobs, achieve 70% broadband penetration, and boost intra-African trade from 15% to 25% by 2030. 

Why this Time is Different 

Skeptics may ask: what makes us believe these proposals will succeed where previous continental initiatives have struggled? Three factors converge to create unprecedented opportunity. 

1.Necessity. External financing constraints are not temporary geopolitical fluctuations but structural shifts in the global aid architecture. African nations no longer have the luxury of waiting for external saviors. The existential imperative for domestic solutions creates political will that previous eras lacked. 

2.Institutional maturity. The AfCFTA, Africa50, African Development Bank, and regional economic communities now possess technical capacity, governance frameworks, and operational track records that enable complex financial engineering. The continental infrastructure for coordinated action exists in ways it did not even a decade ago. 

3.Demographic urgency. Africa's youth population is projected to double to over 830 million by 2050, with 10-12 million young people entering the job market annually against only 3 million formal jobs created. The pension fund and trade facilitation strategies directly address this crisis by creating employment while building retirement security. 

Conclusion 

As 2026 begins, African nations face a choice: accept permanent external dependency and the vulnerability it entails, or seize the opportunity to build sovereign, resilient, and inclusive financing architectures that transform the continent's largest pools of domestic capital into its most powerful tools for economic transformation. 

The Now Generation Network believes the path forward is clear. Africa must finance its own future through strategic pension fund mobilisation and Pan-African trade integration. The capital exists. The institutions exist. The urgency exists. What remains is political will and coordinated action. 

This house believes Africa's moment has arrived, not because external circumstances are favorable, but because internal capabilities are sufficient. The continent that has long been told it needs outside help to develop must now demonstrate what it has always known: that Africa’s greatest resource is Africans themselves, and the capital they generate can build the future they deserve.