Analysts caution as Africa backs AfDB with record $11bn windfall

The latest replenishment, known as ADF-17, is being viewed as a milestone in Africa’s drive towards greater self-reliance.

For the first time, 23 African countries pledged funds to the ADF, which finances the continent’s poorest economies, committing a combined $182.7 million—five times more than in the previous cycle. According to the AfDB, 19 countries contributed for the first time.

AfDB president Dr Sidi Ould Tah described the outcome as a turning point for development finance on the continent.

“In one of the most difficult global environments for development finance, our partners chose ambition over retrenchment, and investment over inertia,” he said.

The replenishment also attracted major partnerships, including up to $800 million from the Arab Bank for Economic Development in Africa and up to $2 billion from the OPEC Fund for International Development, signalling a shift towards risk-sharing arrangements rather than grant-based aid.

However, analysts say the headline figures mask deeper structural constraints.

A finance expert at the University of Dar es Salaam (UDSM), Dr Thobias Swai, said while strengthening the AfDB’s capital base was a welcome move, Africa’s financing needs remain far greater.

“It is a positive step for the AfDB to enhance its financial capacity. However, Africa’s demand for development financing is enormous,” he said.

Dr Swai warned that record mobilisation could intensify competition for concessional loans, potentially raising borrowing costs and restricting access even for countries with sound track records.

He also questioned whether the Bank would be able to maintain adequate capital buffers to meet growing demand.

“The key question is whether the AfDB will have enough capital to satisfy the needs of so many African countries. Pressure on its balance sheet will only increase,” he said.

Mwalimu Nyerere Memorial Academy Rector who is also finance and taxation expert, Prof Haruni Mapesa, said the AfDB remains one of the few institutions capable of providing long-term concessional financing to African governments.

“This is practically the only window through which many African countries can access affordable financing at favourable interest rates,” he said.

However, he warned that sustainability would ultimately depend on repayment discipline and sound governance.

“Weak governance leads to misallocation of funds, undermines repayment and weakens the Bank’s financial position,” Prof Mapesa said.

Despite the risks, he described the AfDB as central to Africa’s economic independence.

“For African countries, the AfDB remains the most viable path away from overreliance on Western aid. But that path will only be sustainable if loans are used productively and repaid responsibly,” he said.

A senior lecturer in economics at the Open University of Tanzania, Dr Lawi Yohana, said Africa’s efforts to finance its own development face significant structural limitations.

“Domestic financing is not easy for Africa. The revenue base of most countries is too small to sustain the scale of development projects underway,” he said.

Dr Yohana added that much of government revenue is absorbed by recurrent expenditure, including wages, debt servicing and essential social services, leaving little fiscal space for large-scale investment.

He said the success of the new financing model would depend on building a stronger private sector capable of participating in infrastructure and industrial projects through public-private partnerships.