Africa enters a new phase: The challenge is no longer just attracting capital

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Opinion | AfricaHeadline

Africa’s investment challenge can no longer be explained simply by a shortage of capital. Increasingly, the question is whether there are enough projects, and enough well-prepared projects, capable of absorbing that capital.

In financial markets, the answer comes down to one word: bankable.

A project does not have to eliminate risk to secure financing, it has to demonstrate that risks have been identified, assessed and, where possible, mitigated, it needs credible revenues, a sustainable business model, a predictable regulatory framework, execution capacity and a financial structure capable of withstanding investor scrutiny.

That distinction matters across some of Africa’s largest economies. Angola, Nigeria, South Africa and Algeria are at different stages of economic transformation, but they share a common opportunity, turning reforms, natural resources, infrastructure and domestic markets into a new generation of investable projects.

Angola: From oil dependence to a new investment pipeline

Angola is one of the clearest examples of an economy seeking to turn macroeconomic stability into broader productive investment.

The economy grew 3.1% in 2025, according to the World Bank, despite constraints linked to oil production. Public debt has fallen sharply from around 116% of GDP in 2020 to about 52% in 2025, materially improving the macroeconomic backdrop.

The next test is converting that improvement into sustained private investment.

Agriculture, mining, energy, logistics, manufacturing and transport offer some of the country’s most significant opportunities.

The Lobito Corridor is particularly important. By connecting Angola’s Atlantic infrastructure with mineral-producing regions in the Democratic Republic of Congo and Zambia, it could create new opportunities in logistics, trade and services.

But resources and infrastructure alone do not guarantee investment. Execution capacity, foreign-exchange risk, regulatory predictability and the quality of financial structures will determine whether announced opportunities become productive assets.

Angola’s opportunity is not to replace oil overnight. It is to build additional sources of growth around its existing resources and infrastructure, gradually reducing the economy’s concentration in crude exports.

Nigeria: Economic scale as an investment asset

Nigeria presents a different equation, it combines one of Africa’s largest populations with a huge consumer market, a dynamic private sector and a rapidly expanding services economy.

The World Bank estimates that the economy grew about 4% in 2025, supported by services, agriculture, construction and stronger oil production. Recent reforms have helped improve fiscal and external balances, while international reserves exceeded $42 billion in the first half of 2025.

Nigeria’s investment case, however, extends well beyond hydrocarbons.

Telecommunications, technology, financial services, manufacturing and consumer industries provide a broad base for private investment. The challenge is to turn macroeconomic stabilisation into sustained productivity gains and stronger private-sector investment.

Currency volatility, financing costs, infrastructure gaps and operating expenses remain significant risks. But scale changes the equation. Even incremental improvements in the business environment can create investment opportunities large enough to attract both domestic and international capital.

For Nigeria, the size of the market is itself an economic asset.

South Africa: Capital, markets and execution capacity

South Africa occupies a different position. It has one of Africa’s deepest financial systems, developed capital markets, a sophisticated banking sector and substantial corporate capacity.

Growth was modest, at about 1.3% in 2025, but average inflation was 3.2%, according to the IMF, reinforcing the credibility of the country’s monetary framework.

The challenge is to unlock productive capacity.

Electricity supply, ports, freight rail and municipal infrastructure continue to constrain growth, at the same time, they represent significant investment opportunities. The IMF estimates that investment could grow by an average of 3.2% a year between 2026 and 2030 if structural reforms advance.

South Africa’s opportunity is therefore not necessarily to build a new financial system. It is to deploy its existing financial capacity more effectively into infrastructure and productive investment.

That capacity also has regional implications. South African banks, companies and investors can play a larger role in financing and structuring projects across the continent.

Algeria: Turning energy assets into diversification

Algeria offers another model. Hydrocarbons remain central to the economy, but non-hydrocarbon sectors are gaining momentum.

GDP grew 4.1% in the first half of 2025, while non-hydrocarbon activity expanded 5.4%, according to the World Bank. Non-hydrocarbon exports have also increased significantly, reaching $5.1 billion in 2023, about three times their 2017 level.

Investment, banking, land and mining reforms are aimed at creating greater room for private-sector participation.

Algeria combines energy resources, a large domestic market, industrial capacity and a strategic location between Europe, North Africa and sub-Saharan Africa. The challenge is to convert those advantages into projects capable of competing for private capital.

For investors, regulatory predictability, productivity and ease of doing business will ultimately matter as much as the country’s natural-resource base.

Capital needs projects it can finance

The four economies represent different investment models.

Angola is seeking to turn diversification into a new investment pipeline, Nigeria has the scale to generate large projects. South Africa has capital, markets and financial expertise. Algeria is seeking to convert energy resources and geographic advantages into a more diversified economic base.

The common challenge is turning economic opportunity into investable projects, that is where the role of commercial banks could evolve.

The approach described by First National Bank, part of FirstRand Group, illustrates this shift. Rather than entering only when a project is ready for financing, the bank seeks to work with clients earlier, assessing the market, business model, risks and execution capacity.

For small and medium-sized enterprises, that difference can be decisive. Large companies can hire financial advisers, engineers, lawyers and consultants to prepare projects. Smaller businesses often cannot.

Models such as Start, Run and Grow seek to address that gap by combining financing with business development.

The principle is straightforward: a bank does not only finance companies; it can help build companies that are capable of being financed, the same logic applies to infrastructure.

Governments can reduce regulatory risks, development-finance institutions can provide guarantees or concessional capital. Commercial banks can assess cash flows and credit risks. Private investors can provide equity and demand returns commensurate with risk.

The objective is not to eliminate risk, it is to place risk with the institution best equipped to manage it.

That distinction will become increasingly important as African economies compete for global capital. Investors are unlikely to finance projects simply because they are strategically important or have been announced by governments. They will look for credible sponsors, predictable rules, verifiable revenue streams, measurable risks and a realistic path to returns.

Project preparation can therefore become a competitive advantage in its own right.

Africa does not simply need more capital. It needs a deeper pipeline of investment-ready companies and projectscapable of absorbing that capital.

For Angola, Nigeria, South Africa and Algeria, that may become one of the defining investment challenges of the next decade.

The competition will not only be over who can attract the most foreign investment, it will increasingly be about who can prepare the projects that investors are willing to finance, in Africa’s next investment cycle, bankability may no longer be simply a condition for securing capital, it could become a strategic economic advantage.