For decades, the promise of development finance in Africa rested on a simple bargain: that capital from wealthy countries, channeled through aid budgets, multilateral banks, and private investors would unlock the continent’s economic potential. The formula shifted, but the underlying assumption held that external finance would lead, and Africa would follow.
That promise is now unraveling. Western aid budgets are shrinking, the United States has gutted its development finance ambitions, and European banks are retreating from the continent. China, too, is changing course, as private companies assume the role once filled by ambitious state lenders, shifting the model from state debt to corporate ownership. Africa is increasingly receiving capital on terms it did not set, in sectors it did not choose, through instruments it cannot control.
For decades, the promise of development finance in Africa rested on a simple bargain: that capital from wealthy countries, channeled through aid budgets, multilateral banks, and private investors would unlock the continent’s economic potential. The formula shifted, but the underlying assumption held that external finance would lead, and Africa would follow.
