Sources of capital on the continent

Development finance institutions

Development finance is critical to meeting Africa’s needs, and a slowdown in the global economy is making it increasingly difficult for the continent to access international financial markets.

DFI commitments by sector

DFIs focus on sectors that can absorb large amounts of capital while still delivering their development priorities. The preference for large deals naturally attracts DFIs to capital-intensive industries, such as energy, manufacturing, and infrastructure. Furthermore, the costs associated with due diligence and structuring deals lead DFIs to focus on a smaller number of larger investment opportunities. In sub-Saharan Africa, energy (9.6bn), financial services (USD 6.6bn), manufacturing (USD 3.0bn) and infrastructure (USD 2.9bn) have attracted the most in DFI commitments. The agricultural sector and extractives have also attracted a significant amount of investment at USD 2.2bn and USD 2.1bn, respectively. While DFI disbursements to health and education services were modest (under 2% of disbursements). The reason for the significant investments in the financial services sector is due, in part, to local banks and financial institutions establishing a presence in their local markets and perceiving lower risks. DFIs also indirectly invest across the sectors through their investment in private equity funds. Only direct DFI investments have been reported in the below charts.

Note: As at 2015. Data set excludes North Africa.

While energy, financial services, manufacturing, and infrastructure sectors typically received the largest amount of DFI disbursements, there are some differences in the various African regions. In Southern Africa, the energy sector attracted the most in DFI commitments at USD 5.5bn. This was followed by financial services (USD 3.5bn) and agriculture (USD 1.4bn). In East Africa, the top three sectors that received DFI funding were financial services (USD 2.5bn), energy (USD 2.1bn) and infrastructure (USD 1.0bn). In West Africa, the energy sector also received the most in DFI funding at USD 2.0bn. However, manufacturing and infrastructure were next at USD 1.4bn and USD 0.8bn, respectively.

Regional breakdown of direct DFI commitments by sector (USDm) Download the graph PDF (26KB)

Note: As at 2015. Data set excludes North Africa.