By Business Insider Reporter
As Africa grapples with an estimated US$402 billion annual development financing gap, the African Development Bank Group (AfDB) is signalling a decisive shift in how the continent will fund its growth.
The message coming out of London in mid-December is clear: aid alone is no longer enough – private capital must move to the centre of Africa’s development story.
Building on the successful conclusion of the 17th replenishment of the African Development Fund (ADF-17), which mobilised $11 billion for Africa’s most vulnerable countries, the AfDB Group and the Government of the United Kingdom convened global investors to accelerate a new era of private capital mobilisation for Africa.
The inaugural Africa Private Capital Mobilisation Day, held on December 17 at Lancaster House in London, brought together more than 150 senior decision-makers from private equity firms, pension funds, sovereign wealth funds, insurers, philanthropies, development finance institutions and export credit agencies. Importantly, the gathering was not another talking shop. It marked a transition from dialogue to execution.
From donor dependency to investment-led growth
For East Africa – and particularly Tanzania, which has ambitious targets under Dira 2050 – this pivot could not be more timely. While public investment and concessional financing remain critical, governments across the region face rising infrastructure needs, growing urban populations, climate pressures and tight fiscal space.
Speaking at the opening of the London meeting, AfDB Group President Dr. Sidi Ould Tah framed the initiative as a continuation of ADF-17 and a cornerstone of the Bank’s push for a New African Financial Architecture.
“We will build on recent engagements with development finance institutions, export credit agencies, pension funds, sovereign wealth funds, insurers, and philanthropic partners to advance concrete initiatives under our vision for a New African Financial Architecture,” he said.
At the heart of this vision are the President’s Four Cardinal Points: unlocking Africa’s capital potential, strengthening financial sovereignty, transforming demographic growth into an economic dividend, and delivering resilient infrastructure and value chains.
For Tanzania, where infrastructure, energy, health systems, aviation and industrialisation remain priority growth drivers, these focus areas align closely with national development goals.
Why London – and why now?
The event was co-hosted with key UK institutions – including the Foreign, Commonwealth and Development Office (FCDO), UK Export Finance, and British International Investment – underscoring the City of London’s continued role as a global financial hub.
UK Minister for Development Jenny Chapman captured this shift succinctly.
“The UK’s shifting role – from donor to investor – will support countries who want to grow their economies and ultimately exit the need for aid,” she said.
For African economies like Tanzania, this transition matters. Moving from aid dependence to investment-led growth improves policy ownership, accountability and sustainability, while attracting longer-term capital that supports productive sectors rather than consumption.
Rethinking risk in Africa
A recurring theme during the discussions was the need to challenge outdated perceptions of risk associated with African markets. New analysis presented from the Global Emerging Markets Risk Database, delivered by the Center for Global Development, showed that long-term lending to African borrowers has historically been far less risky than commonly assumed.
This finding is significant for East African economies, where risk premiums often inflate borrowing costs and deter private investors despite strong fundamentals.
Tanzania, in particular, has benefited from macroeconomic stability, sustained growth and large-scale public investments – conditions that are attractive to long-term investors when risk is properly priced.
Strategic sectors with regional impact
Sector-focused sessions highlighted healthcare and aviation as catalytic industries for Africa’s next growth phase – both of which have strong implications for Tanzania.
Two flagship initiatives stood out: The Africa Medicines and Equipment Facility, developed with the Gates Foundation, aims to provide African countries with predictable and affordable financing for essential medicines and medical equipment.
For Tanzania, which is investing heavily in health system resilience and local pharmaceutical capacity, this could strengthen supply chains and reduce import vulnerabilities.
Second is the Integrated Aviation Transformation Programme for Africa, supported by a blended-finance facility, seeks to modernise airports, airlines and aviation services.
As Tanzania positions itself as a regional logistics, tourism and trade hub – with Air Tanzania’s expansion and airport upgrades underway – access to structured private capital could accelerate this ambition.
Innovation labs and new financing tools
Beyond sector financing, President Ould Tah also convened a closed-door roundtable with executives from around 30 major institutional investors to explore the creation of an Africa-focused Private Sector Innovation Lab. The proposed platform would co-create new financing instruments, risk-sharing mechanisms and partnership models tailored specifically to African markets.
For countries like Tanzania, such innovation could unlock pension funds, insurance assets and regional capital markets that remain underutilised despite growing domestic savings.
Implications for Tanzania and East Africa
The outcomes of the London meeting are captured in the London Communiqué, which commits the AfDB and its partners to translating ambition into bankable projects, scalable platforms and credible risk-mitigation solutions.
For Tanzania, the implications are profound. If successfully implemented, this approach could mean more affordable long-term financing for infrastructure, health, energy and aviation; deeper private sector participation; and reduced pressure on public finances.
As Africa repositions itself in the global financial system, the AfDB’s push to mobilise private capital signals a future where development is financed not just by goodwill, but by confidence in Africa’s growth story. For Tanzania and its East African neighbours, that confidence may prove to be one of the most valuable investments of all.
