Leading business executives and investors across Africa are pushing back against the continent’s high-risk profile, urging for more favorable investment conditions as the African Development Bank (AfDB) plans to establish an Investment Guarantee Agency (IGA) aimed at de-risking investments and attracting more foreign direct investment (FDI).
The move comes amid growing concern from investors and international financiers who perceive Africa’s investment climate as high-risk, citing political instability, regulatory inconsistencies, and poor infrastructure. The AfDB’s proposal to establish the IGA is viewed as a strategic initiative to protect investors from unforeseen financial risks and stimulate large-scale investments across the continent.
Africa’s Investment Risk Profile Under Scrutiny
During a high-level business forum hosted in Nairobi, major business leaders and investors expressed concerns that Africa’s negative risk profile has significantly hindered foreign investments, making it difficult for startups, SMEs, and large corporations to attract capital.
“It is time we change the global perception of Africa as a high-risk investment destination. If we do not address this challenge, we will continue to miss out on substantial global investments,” said James Mwangi, CEO of Equity Group Holdings.
The AfDB’s Investment Guarantee Agency (IGA) is expected to address key issues such as:
- ✅ Providing political risk insurance for large-scale investors.
- ✅ Guaranteeing investment capital in case of business losses or political instability.
- ✅ Enhancing investor confidence through structured financial protection.
The AfDB President, Dr. Akinwumi Adesina, reaffirmed the bank’s commitment to creating an investment-friendly climate across Africa. He emphasized that the IGA would significantly lower perceived investment risks, making Africa a prime destination for global capital inflows