African countries need to deepen domestic capital markets, strengthen regional cooperation and adopt innovative financing models to close the continent’s infrastructure financing gap, Stanbic Bank Tanzania has said.
The call was made during the two-day Africa50 Annual General Shareholders Meeting and Africa Infrastructure Forum held in Dar es Salaam, which brought together policymakers, financiers, development institutions and private-sector players to discuss ways of increasing African participation in financing the continent’s development.
Speaking during a plenary session titled “Pace Setters: African-Designed, African-Led,” Stanbic Bank Tanzania chief executive Manzi Rwegasira said the continent already has financial institutions capable of supporting development, but their capacity must be significantly expanded.
“All the good answers will be given, but I think it boils down to scale. We need to think about how we can scale up what we already have on this continent,” Mr Rwegasira said.
He said institutions such as the African Development Bank and Africa50 were important in supporting infrastructure development, but could not meet the continent’s financing requirements alone.
Mr Rwegasira called for greater mobilisation of domestic savings through stronger capital markets, particularly government and corporate bond markets.
“We need to make better use of our national domestic bond markets. They’re still too shallow and too small. We need to make them bigger,” he said.
Mr Rwegasira also urged African countries to work more closely to mobilise capital for large infrastructure projects, arguing that regional cooperation could help unlock financing that individual countries may struggle to secure independently.
“Maybe regional cooperation is where we can start. We need to work together in collaboration to bring the capital that we have to bear,” he said.
He also pointed to securitisation and infrastructure asset recycling as potential mechanisms for governments to generate additional funding from existing infrastructure.
“Securitisation allows you to recycle the same capital that we have. If we can recycle infrastructure assets, we can use what has already been built to finance new infrastructure,” he said.
The discussions were held against the backdrop of efforts to promote an African-led financing model under the proposed New African Financial Architecture for Development (NAFAD), which seeks to bring together African banks, sovereign investors, insurers, development finance institutions and governments.
Stanbic Bank Tanzania head of Corporate and Investment Banking Ester Manase said infrastructure projects require collaboration among commercial banks, governments, development finance institutions and institutional investors because of their long repayment periods and high capital requirements.
“The biggest takeaway for me is collaboration. Every stakeholder has an important role to play, but none of us can achieve these ambitions alone,” Ms Manase said.
She said commercial banks had an important role in infrastructure financing, but could not independently provide all the long-term capital required for major projects.
“Commercial banks can only support infrastructure financing to a certain extent. Because these are long-term investments, we need development finance institutions, insurance companies and both the public and private sectors to work together,” she said.
According to Ms Manase, infrastructure development is central to economic growth because it improves the movement of agricultural produce and other goods while facilitating domestic and international trade.
“We believe infrastructure helps unlock the economy. It makes it easier to move agricultural produce and other goods, facilitates imports and exports, and supports overall economic development,” she said.
Ms Manase said Tanzania’s geographical position gives it an opportunity to strengthen its role as a transport and logistics hub for East and Central Africa.
She cited the country’s eight neighbouring countries, six of which are landlocked, as a major opportunity for Tanzania to expand regional trade and transit services.
“Tanzania is in a very strategic location. We have eight neighbouring countries, six of which are landlocked. That gives us a unique opportunity to become the region’s hub,” she said.
She said investments in ports, the Standard Gauge Railway and roads could further strengthen Tanzania’s connectivity with neighbouring markets and support regional supply chains.
Former President Jakaya Kikwete told the forum that infrastructure development should ultimately be measured by its impact on people’s lives and economic opportunities.
He said Africa’s growing youth population could become a major economic asset if governments combine infrastructure investment with greater spending on education, skills development and employment creation.
Dr Kikwete argued that roads, railways and energy projects should not be treated as development achievements in themselves, but as tools for increasing productivity, supporting businesses and improving living standards.
The discussions at the forum highlighted the growing need for Africa to mobilise more of its own financial resources while attracting complementary international capital.
For Tanzania, greater access to long-term infrastructure finance could support ongoing investments in transport, logistics and other strategic sectors while strengthening the country’s position as a gateway to landlocked markets in the region.
