Africa stands on the brink of an era marked by promise, potential and significant transformation. However, the continent’s economic progress remains inconsistent, not due to a lack of ambition or capability, but because of financial gaps that external sources alone cannot fill.
It is now widely acknowledged that Africa’s development course necessitates large-scale, long-term, patient capital, which aligns with African priorities and is rooted in Africa’s realities. This is why homegrown finance, mobilised and managed by African institutions, must constitute the core of Africa’s development agenda for sustainability, alignment, and the long-term perspective required for structural transformation.
South Africa, as one of the continent’s leading financial and institutional hubs, has an important catalytic role to play in advancing homegrown finance and fostering collaboration across society to achieve inclusive and sustainable development. If African public institutions, private investors and development finance partners work in alignment, designing and financing sustainable, transformative solutions is possible.
Nowhere is this clearer than in the advancement of structural transformation through African-led development institutions. Multilateral and development institutions such as the African Development Bank (AfDB) have demonstrated the power of leveraging African capital and expertise to anchor long-term development. South Africa’s leadership in the Presidential Infrastructure Champion Initiative (PICI), a high-level African Union Development Agency (AUDA-NEPAD) initiative, reflects this commitment. By enabling heads of state and government to champion priority regional infrastructure projects, PICI has shown that political leadership can unlock cross-border value chains, accelerate implementation, and inspire investor confidence in ways that purely technocratic processes cannot.
Across global platforms, such as the G20 under South Africa’s presidency, the UN General Assembly, the 4th International Conference on Financing for Development, the Hamburg Sustainability Conference, and the Luanda Summit for Africa’s Infrastructure Development, one recurring message has stood out: domestic resource mobilisation remains the most reliable and sustainable engine of development finance. The Leaders’ Declaration of the G20 South Africa Summit underscores this, affirming that domestic resources not only provide predictable funding but are also essential in building debt sustainability in developing and low-income countries.
For homegrown finance to reach its full potential, African countries must establish governance and policy frameworks that enable investment to take place at scale. South Africa’s Renewable Energy IPP Procurement Programme (REIPPPP) provides a good continental example. Globally recognised for its transparency and competitive bidding model, the programme has attracted billions in private and institutional capital and delivered over 6 gigawatts (GW) of operational renewable capacity. REIPPPP illustrates that when governance is strong, regulation is clear, and political commitment is sustained, homegrown finance becomes a powerful engine for transformation.
Yet governments cannot achieve this alone. Development finance institutions, multilateral partners, pension funds and private investors each play a role in translating policy intent into real investments on the ground. Strong partnerships that are built on trust, capable institutions and shared purpose remain essential to achieving the reforms and development outcomes envisaged. We therefore need to ensure strong partnerships between the state, the private sector, multinational institutions, development finance institutions and communities in our aims to achieve reforms and development goals.
Development cannot happen when the communities that are meant to be uplifted are excluded. Infrastructure investments must create jobs, enable micro, small, and medium enterprises (MSMEs), and broaden access to services such as electricity, digital connectivity, and transport.
Governments can embed equity through procurement rules, local content frameworks, youth and women participation and community ownership mechanisms.
South Africa embeds equity ethos through local content requirements, community ownership in IPP projects, skills development and supplier development programmes and targeted support for MSMEs. South Africa’s REIPPPP community trusts, which have channelled more than R2bn into local social projects, demonstrate how energy infrastructure can uplift communities, strengthen social cohesion, and contribute to a just transition. This shows that a just energy transition is not just an opportunity to decarbonise, but also about building industries and skills, creating jobs and livelihoods, and involving communities as partners and beneficiaries.
The world is undergoing rapid geopolitical shifts, with changing alliances and new centres of economic gravity. This moment presents Africa with a rare window of opportunity. While Africa’s development goals are clear, articulated in AU Agenda 2063 and aligned with the UN Sustainable Development Goals (SDGs), there is a need to significantly deepen capacity to implement the development goals and finance the continent’s future.
Amid these geopolitical shifts, Africa needs to centre the importance of multilateralism and partnership in building a better Africa and a better world. Homegrown finance offers a pathway for Africa to participate more effectively in reshaping the global financial architecture, advancing its priorities, and securing its future.
The moment for Africa to invest in Africa has arrived. We should not allow it to pass us by.
• Ramokgopa is minister in the presidency for planning, monitoring & evaluation.
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