As external financing to Africa declines in scale and reliability, domestic capital must anchor the continent's development, with foreign funding playing a complementary role, according to a new report by the Africa Finance Corporation.

Launched on Thursday at the Africa We Build Summit, the report estimates that cumulative external flows to Africa reached about $1.7 trillion between 2014 and 2024, compared with more than $2 trillion in non-bank domestic capital pools across the continent.

The report found that Africa's development challenge has shifted from mobilizing capital to intermediating it - converting savings into infrastructure, industry, and productive investment at scale.

Domestic institutional capital has grown significantly with pension and insurance assets surpassing $1 trillion for the first time. Public development bank assets stand at $276 billion, while sovereign wealth funds hold $164 billion. Central bank reserves also rose from $480 billion in 2024 to $530 billion last year.

The growth has partly been supported by stronger commodity dynamics and rising gold accumulation. Gold now accounts for about 17 percent of Africa's total reserves, up from less than 10 percent in 2022–2023, while physical holdings rose from 663 metric tons in 2022 to an estimated 738 tons last year.

Meanwhile, external financing is becoming less reliable. Official development assistance to Africa fell from $84 billion in 2020 to $74 billion in 2023 and is projected to decline further. The Organization for Economic Cooperation and Development estimates global aid fell 23 percent last year, the largest annual contraction on record.

edithmutethya@chinadaily.com.cn