A 2025 World Bank study of 4,918 FDI projects across 24 African countries finds that investment boosts employment, upgrades skills, and generates spillovers to domestic firms (Hoekman et al., 2025). Intra-African FDI, focused on finance, manufacturing, and digital infrastructure tends to produce stronger local multipliers than extractive-sector investment, which often operates with limited domestic linkages.

Africa also has significant untapped domestic capital. Ghana and Nigeria alone hold nearly $40 billion in pension assets, over 90% of which is invested in government securities. Reallocating even a fraction into productive investments would substantially expand the continent’s internal capital base. The constraint is less capital availability than capital allocation.
The AFCFTA Variable
By January 2025, 48 African countries had ratified the AfCFTA. The World Bank estimates that full implementation could increase total FDI into Africa by up to 120% and intra-African investment by about 85%. This would lead to reduced tariffs, harmonised standards, and lower regulatory friction make cross-border investment more viable by cutting transaction costs.
PAPSS is already improving the financial infrastructure behind this integration. Historically, most African cross-border payments were routed through correspondent banks outside the continent, adding cost, delay, and currency risk. PAPSS enables direct settlement between African central banks, reducing reliance on external financial systems.

Intra-African trade rose 12.4% in 2024 to $220.3 billion, recovering from a 5.9% decline in 2023. The key question is no longer functionality, but scale—how quickly adoption reaches the level where efficiency gains become self-reinforcing.

 

Conclusions
Africa’s investment in Africa is rising. From negligible intra-continental flows in the 1990s, the continent now holds $76 billion in intra-African FDI stock, a growing base of African multinationals operating across 18–36 markets, and pan-African institutions deploying capital at scale. The direction of change is clear.

The Asian and European experiences highlight what is required. East Asia aligned industrial policy with corporate expansion under the Flying Geese model, while Europe combined integration with legal certainty and cohesion funding. Africa now needs similar alignment: AfCFTA as the framework, domestic savings and pension funds as capital, and African corporates as the execution layer.
The question is no longer whether Africa can attract foreign capital—it already does. The real issue is whether African capital can be mobilised and compounded within the continent. The direction is clear; the determining factor is speed.