As AFC Summit Reignites Nigeria’s Funding Debate

Nigeria’s renewed push for value-addition highlights the real gap: not capital, but its use, an argument reinforced by the Africa Finance Corporation at its last summit in Nairobi, Kenya. Festus Akanbi reports

Nigeria’s latest push to force more local processing of raw materials before export has brought an old problem back into sharp focus: the country cannot continue to ship out value and then borrow heavily to import jobs, technology, and finished products.

In November 2025, the federal government said it planned to require at least 30 per cent value addition before raw materials could be exported, describing the move as a major step towards industrialisation. Minister of Innovation, Science and Technology, Kingsley Udeh, said the idea was to ensure that Nigeria’s natural wealth is not exported in its rawest form, but processed enough to deepen local content, expand manufacturing, and create jobs. He cited an example, arguing that the country should produce lithium concentrate or lithium salt at home rather than merely exporting ore.

Analysts said that policy direction is important, but on its own, it will not solve the problem. Local processing requires power, transport, storage, industrial parks, logistics, patient capital, and policy stability. In simple terms, Nigeria cannot preach value addition while starving its industry of the infrastructure that enables it. This is where the debate at the Africa Finance Corporation’s The Africa We Build summit in Nairobi, last week, becomes relevant to Nigeria’s immediate choices. AFC’s latest infrastructure report says Africa’s problem is no longer the total absence of capital. Rather, it is the failure to channel available savings into productive assets at scale.

 According to the AFC, Africa’s non-bank domestic capital pools now exceed $2 trillion, above the roughly $1.7 trillion in cumulative external flows recorded between 2014 and 2024, while Reuters, citing the same report, said the broader domestic capital stock across the continent is above $4 trillion.

For Nigeria, that finding is particularly significant. The country is not operating in a capital desert. The pension industry alone had grown to about N29.4 trillion by February 2026, according to PenCom data reported by Proshare, while reports indicate that the regulator was already seeking to diversify the country’s retirement savings toward infrastructure and private equity because too much of the fund remains parked in government debt. Reuters said roughly 60 percent of the fund was invested in government securities and less than 10 percent in corporate securities.

That is the contradiction at the heart of Nigeria’s development struggle. The country needs roads, rail, power, gas pipelines, mineral processing plants, ports, and industrial corridors, yet large domestic savings still prefer the safety of treasury instruments. This is why AFC President and Chief Executive, Samaila Zubairu, argued in Nairobi that the issue is not whether the building blocks exist, but “how they are brought together.” His broader point was that Africa already has capital, energy resources, transport routes, digital possibilities, and industrial inputs, but lacks the systems that connect them into investable, scalable outcomes. That diagnosis speaks directly to Nigeria, where disconnected infrastructure has often left assets stranded rather than fostering industrial ecosystems.

The case against raw export is also getting stronger because the old model is becoming more expensive. At the summit, Aliko Dangote put it bluntly: Africa exports raw materials, and imports finished goods, and in doing so “exports jobs and imports unemployment.” That line captures Nigeria’s dilemma. A country that exports crude, minerals, and agricultural produce with limited local transformation loses the higher-value stages of production to other economies.

 Udeh’s 30 per cent value-addition plan is therefore not just a trade measure; it is an attempt to retain more of the value chain within Nigeria. But that ambition will succeed only if financing shifts from short-term comfort to long-term productive use.

Dangote also warned that Africa had made “serious mistakes” by relying too heavily on foreign investors. Kenyan President, William Ruto, made the same point from another angle when he said countries must use their own resources to develop themselves and stop speaking only about potential. 

Their shared message aligns with present-day Nigerian realities. The federal government’s 2026 budget projected a deficit of 4.28 percent of GDP, while debt service remained high at N15.52 trillion. That means fiscal space is limited, and public finance alone cannot carry the infrastructure burden.

The scale of that burden is huge. Reuters reported in 2025 that Nigeria’s infrastructure deficit could reach $878 billion by 2040. The same report noted that PenCom was looking for commercially viable infrastructure vehicles because the economy needs higher-yield assets and better real-sector outcomes. Nigeria’s power crisis alone shows what underinvestment costs: Reuters reported in December 2024 that frequent grid failures and weak infrastructure were costing the economy about $29 billion annually.

This is why AFC’s role matters. AFC’s Senior Vice President and Head of Capital Mobilisation and Partnerships, Mohammed Abdul-Razaq, said about 90 per cent of infrastructure projects in Africa fail at the development stage. His point was that many projects die before they become bankable because they lack early-stage capital for feasibility, technical, and environmental work. 

He cited Segilola Gold in Osun State as an example of how AFC helps de-risk projects from concept to commercial operation. The corporation has also been involved in Nigeria’s domestic dollar bond market: the federal government said its first domestic dollar bond raised more than $900 million after heavy subscription. In contrast, the Ministry of Finance later said the offer had initially targeted $500 million and was oversubscribed by 180 per cent, with AFC acting as the global coordinator.

Analysts believe that the transaction is important because it proves a larger point Abdul-Razaq made: if the right instruments are created, domestic capital can respond. Nigeria also has an institutional model in InfraCredit, which provides guarantees for local-currency infrastructure financing and helps make projects more attractive to pension funds and other investors. Reports say that PenCom is pressing for more suitable vehicles and broader instruments to safely unlock this kind of investment.

The way forward, then, is becoming clearer. Speakers at the AFC summit argued that Nigeria needs to discourage the export of raw materials not merely by law, but by making local processing commercially possible.

 That means stable power, better freight links, industrial clusters, deeper gas infrastructure, and financial structures that reduce risk for long-term investors. It also means stronger guarantees, better project preparation, and clearer regulation so pension and insurance funds can participate without reckless exposure. 

AFC argues that Africa’s savings must be intermediated better; Nigeria’s argument should now be that those savings must be matched deliberately to industrial policy.

The real test is execution. Nigeria already knows what happens when raw materials are exported cheaply and finished goods are imported at high cost. It also knows that waiting endlessly for foreign capital has delivered too little. 

The country now has a policy signal on value addition, a growing pool of domestic savings, evidence that local investors can absorb large instruments, and an AFC framework built around de-risking and scale. The task is no longer to complain about what Nigeria lacks. It is to connect capital, infrastructure, and industry quickly enough to keep more value at home.