AfDB says Africa nears $1 trillion in state assets as growth outlook improves

Monday 8th September 2025

by inAfrika Newsroom

Africa state-owned assets 1 trillion is no longer a slogan. It is now a near-term reality, according to new data from sovereign wealth tracker GlobalSWF and growth projections from the African Development Bank (AfDB). Together, they show governments quietly building balance-sheet muscle, even as foreign capital flows remain volatile.

The GlobalSWF report estimates that African public pension funds, central banks and sovereign wealth funds now manage about $1 trillion in assets. Five new sovereign funds were created in 2025 alone, including vehicles in Botswana, the Democratic Republic of Congo, Eswatini, Kenya and Nigeria’s Oyo State. Yet these funds still represent only around 1 percent of global sovereign wealth.

AfDB’s November update on Africa’s Macroeconomic Performance and Outlook projects average real GDP growth of 4.2 percent in 2025 and 4.3 percent in 2026. That is 0.3 percentage points higher than the Bank’s forecast earlier this year, helped by disinflation, stronger private consumption and reforms to ease structural bottlenecks.

However, the picture is uneven. Commodity-heavy exporters remain exposed to price swings. Conflict and climate shocks weigh on several Sahel and Horn of Africa economies. Meanwhile, foreign direct investment into Africa rose 75 percent in 2024 but fell 42 percent in the first half of 2025 as higher global rates and geopolitical tensions cooled risk appetite.

Next steps

Finance ministries are under pressure to make Africa state-owned assets 1 trillion work harder. Many funds have mandates to catalyse domestic investment, not simply park reserves offshore. That means deploying more capital into infrastructure, climate-smart agriculture, renewable energy and social services.

Regulators are also tightening governance rules. Several newer funds have adopted Santiago Principles-style disclosure standards from launch. Others are revising investment charters to reduce political interference and improve risk management.

AfDB and regional development banks are pushing blended-finance structures that crowd in private investors alongside sovereign funds. This could lower borrowing costs for roads, ports and grids, while giving funds stable, long-dated returns.

Why it matters

The shift from aid towards domestic capital is strategic. When African institutions finance more of Africa’s growth, countries gain resilience against external shocks and policy swings in donor capitals.

Stronger sovereign and pension funds can also anchor local capital markets. They buy government bonds, list portfolio companies and support green or infrastructure bonds, which deepens liquidity for other investors.

For citizens, the key questions are transparency and impact. If Africa state-owned assets 1 trillion finance jobs, reliable power and climate-resilient infrastructure, trust will grow. If they sit idle or feed patronage, public anger will follow. The next few years will test which path governments choose.