The African Development Bank (AfDB) will invest $125 million in the African Trade and Investment Development Insurance (ATIDI), becoming its largest shareholder and strengthening the use of guarantees to attract private capital to the continent, the bank’s president, Sidi Ould Tah, told Reuters.
Sidi Ould Tah, who took leadership of Africa’s largest development bank in September last year, is promoting a new financing model at a time when development aid from wealthy countries fell by almost 25% in 2025, totaling $174.3 billion. The United States led the cuts, including contributions to the AfDB’s concessional window.
The investment is part of the strategy known as the New African Financial Architecture for Development (NAFAD), which aims to mobilize around $4 trillion in African institutional capital – including pension funds, sovereign wealth funds, and savings schemes – currently fragmented and poorly coordinated, to help bridge an estimated $400 billion annual development financing gap.
“Our target is to raise the level of guarantees provided by ATIDI to $10 billion per year and reach a scale that unlocks enormous potential for infrastructure financing in Africa,” Tah said following the AfDB annual meetings held in Brazzaville, Republic of Congo.
According to him, the capital injection will increase the AfDB’s shareholding in the agency from 3% to 14%. In recent years, ATIDI has guaranteed an average of about $3 billion in investments annually.
Push to Expand Shareholder Base
Headquartered in Nairobi, Kenya, ATIDI was established 25 years ago to reduce investment risk in Africa through insurance and guarantees that help channel private capital into markets considered more risky.
The organization is currently owned by 24 African states and several institutional investors, including African financial institutions and Germany’s KfW Development Bank, which joined the shareholding structure in April this year.
The AfDB’s increased stake marks a shift from ATIDI’s traditionally dispersed ownership structure, where shares were spread across member states, with countries such as Togo and Benin among the largest shareholders.
Tah said the AfDB is encouraging more African governments and investors to acquire stakes in ATIDI in order to strengthen its capital base and expand its guarantee capacity.
“We are also in discussions with various financial institutions and several countries to increase their contributions or to become shareholders if they are not yet part of the structure,” he explained.
France is also considering increasing its shareholding, with further details expected at a G7 meeting scheduled for later this month in Evian.
However, some analysts argue that African countries should focus on boosting domestic savings to build stronger internal capital pools. World Bank data shows that Sub-Saharan Africa’s savings rate is around 18%, less than half the global average, due to low incomes and a young population.
Still, Sidi Ould Tah remained optimistic: “Africa can mobilize African resources to finance African development.”
Source: Reuters
