The Minister of Finance and Development Planning, Augustine Kpehe Ngafuan, has challenged the World Bank Group to move beyond mobilizing larger volumes of private investment and take concrete measures to reduce the high cost of capital facing African economies, arguing that expensive financing is constraining the continent’s ability to build infrastructure, expand businesses and accelerate economic transformation.
Speaking at the ongoing International Monetary Fund (IMF) and World Bank Group Annual Meetings in Bangkok, Ngafuan acknowledged progress under World Bank Group President Ajay Banga in mobilizing private capital for developing economies. However, he argued that the scale of Africa’s financing needs demands more ambitious action to make capital affordable and ensure that investment reaches countries and communities where it can deliver meaningful development outcomes.
The minister cited an increase in private capital mobilization by the World Bank Group from US35billioninfiscalyear2022toUS112 billion in fiscal year 2026. For Africa, he said, the amount rose from approximately US9billiontoUS22 billion over the same period.
While describing the increase as encouraging, Ngafuan maintained that the figures must be measured against the continent’s financing requirements and the cost at which African countries access funds.
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“Africa faces financing needs estimated at 900 billion U.S. dollars, including an infrastructure financing gap of 68 to 108 billion U.S. dollars,” he told the gathering of global economic policymakers and finance officials. “We need private capital, and we need it at scale, at affordable rates, and flowing to countries that need it most.”
The cost of capital refers to the price borrowers pay to obtain financing. For governments, this includes interest on loans and bonds, as well as fees and other financing expenses. For businesses, it affects the cost of borrowing to expand operations, acquire equipment, build factories or enter new markets.
African borrowers often face higher financing costs than borrowers in advanced economies. Those costs reflect several factors, including currency volatility, debt sustainability concerns, limited liquidity in some markets, institutional weaknesses, exposure to external economic shocks and investors’ assessments of political and economic risks.
Ngafuan’s argument, however, is that the price assigned to African risk can exceed what underlying economic conditions justify. When investors perceive a country or region as riskier than its economic fundamentals warrant, the resulting premium can make borrowing more expensive even where viable projects and investment opportunities exist.
Citing figures attributed to UNICA, Ngafuan said perceived distortions in African risk assessments add approximately 2.9 percentage points to borrowing costs, translating into an estimated US$75 billion annually in additional financing expenses.
“Africa should not have to pay premium for risks that are perceived rather than demonstrated,” he said.
The US$75 billion estimate is particularly consequential because it represents resources that could otherwise support infrastructure, public services, productive investment and employment. The estimate should be understood as a figure cited by the minister rather than an independently verified calculation in this report.
The broader issue has been documented in continental policy discussions. The African Union and other institutions have repeatedly called for reforms to the international financial architecture, including more credible risk assessments, improved access to concessional financing and a stronger African voice in decisions affecting the cost and availability of capital
For governments already allocating significant portions of public revenue to debt servicing, higher interest costs can narrow the fiscal space available for development. Borrowing becomes more difficult to sustain, while governments face tougher choices between servicing existing obligations and funding infrastructure, education, healthcare, electricity and other essential services.
For private businesses, expensive credit can delay investment, restrict expansion and make locally owned enterprises less competitive against firms operating in economies with cheaper financing.
The consequences can extend across generations.
Ngafuan framed his intervention around three connected concerns: how international development institutions allocate their risk-bearing capacity, whether private investment builds African businesses, and how the continent can reduce the premium attached to its perceived risk.
The minister questioned what concrete changes the World Bank Group was making in the allocation of its financial capacity, guarantees and institutional incentives to ensure that private capital supports structural transformation, particularly in low-income, fragile and underserved African economies.
The concern is that aggregate investment figures can conceal where financing actually goes. Investors may gravitate toward larger economies, established markets and projects with predictable revenue streams, while countries with weaker infrastructure and greater development needs struggle to attract affordable funding.
Guarantees and other risk-sharing instruments can help bridge this divide. By absorbing a defined portion of potential losses or reducing particular risks, development finance institutions can make otherwise difficult investments more attractive to private lenders and investors.
But Ngafuan’s argument implies that the success of these mechanisms should not be judged only by the amount of private money they mobilize.
The policy challenge is to deploy guarantees strategically without transferring excessive risks to public institutions or exposing taxpayers to poorly managed liabilities.
Ngafuan also challenged the WBG to ensure that large private-sector transactions create opportunities for African enterprises, strengthen local supplier networks and generate employment.
His position places domestic economic participation at the center of the debate over development finance. An investment may bring substantial foreign capital into a country, but its contribution to long-term development depends partly on how much economic activity remains within the local economy.
If a project imports most of its equipment, relies heavily on foreign contractors and generates few opportunities for local suppliers, the wider benefits for domestic businesses may be limited. By contrast, investments that develop local supply chains, transfer skills, create jobs and support African-owned enterprises can generate benefits beyond the immediate project.
This is particularly relevant to Liberia and other economies seeking to expand productive capacity. Affordable capital is important not only for governments financing public infrastructure but also for local businesses that need working capital, machinery, technology and long-term financing.
Ngafuan’s argument therefore connects the cost of capital with a second question: who benefits from the investment once it arrives?
For the minister, the objective should be to expand African enterprises’ ability to compete domestically and across borders, rather than measure success simply by the volume of foreign financing secured.
The minister’s third concern was the additional cost imposed on African borrowers by perceptions of risk.
He urged the World Bank Group to explain what measures it was taking to address what he described as pricing distortions, pointing to guarantees, improved risk data, credit enhancements and stronger engagement with credit-rating agencies and investors.
Credit ratings influence how investors assess a borrower’s ability and willingness to repay. Lower ratings can raise borrowing costs or limit access to certain markets, while a stronger assessment can widen the pool of potential investors.
Ngafuan’s position is that risk assessments should more accurately reflect country-specific economic conditions, including reforms, revenue prospects, growth potential and debt-management capacity. A generalized view of Africa as a high-risk destination, he argues, can obscure differences between countries and investment opportunities.
Yet reducing the risk premium requires more than challenging external perceptions. African governments must also address genuine risks through credible economic policies, transparent public finances, predictable regulation, stronger institutions and reliable data.
The challenge, therefore, is twofold: improve the fundamentals that make investments safer while reforming assessment methods that may overstate risks or fail to account adequately for differences among African economies.
Ngafuan’s intervention forms part of a wider continental debate over the cost of capital, debt sustainability and the structure of global financial governance.
At the Africa Forward Summit in Nairobi in May 2026, Kenyan President William Ruto and other African leaders called for reforms to improve access to credit and reduce borrowing costs. The summit also advanced a proposal for a first-loss guarantee mechanism intended to help attract private investment by absorbing an agreed portion of potential losses. French President Emmanuel Macron backed the initiative, while United Nations Secretary-General António Guterres criticized a global financial system in which African countries can face borrowing costs substantially higher than those of advanced economies.
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The argument advanced by these leaders is that the continent’s development prospects should not be constrained by financing arrangements that make productive investment disproportionately expensive. Risk-sharing instruments can potentially reduce the burden on individual borrowers and encourage private capital to enter markets it might otherwise avoid.
The African Union has also placed the issue at the center of its financial reform agenda. In October 2026, AU Commission Chairperson Mahmoud Ali Youssouf chaired a high-level roundtable in Mauritius where participants discussed the need for a coordinated approach extending beyond credit-rating reform to the wider financial architecture affecting the cost and availability of finance across Africa.
These efforts reflect growing recognition that the cost of capital is not merely a technical matter for finance ministries.
Several initiatives are being advanced to address the structural challenges Ngafuan identified such as The Africa Credit Rating Agency (AfCRA), the New African Financial Architecture for Development (NAFAD), and others.
While Ngafuan called for reforms by international financial institutions and investors, he acknowledged that African governments have responsibilities in making their economies more attractive to investment.
These include improving governance, ensuring policy predictability, strengthening project preparation and creating conditions under which investors can assess opportunities with greater confidence.
Ngafuan’s intervention has direct implications for Liberia, where financing is needed for infrastructure, electricity, agriculture, education, healthcare and private-sector development.
“Our ultimate objective must not simply be to mobilize more capital for Africa, but to mobilize more affordable capital that transforms African economies, empowers African enterprises, and improves African lives,” he said.
