Nigeria, S/Africa to fasttrack investments in infrastructure

Agency Report

Africa’s two economic heavyweights – South Africa and Nigeria- are stepping up efforts to address their long-standing infrastructure deficits, which have long constrained growth and competitiveness.

While Nigeria is looking at tapping into its N23.62 trillion retirement savings, South Africa is looking at getting funds from private investment.

“Meanwhile, Nigeria’s pension fund regulators are charting a bold course toward diversification, aiming to unlock new capital streams by channeling more investments into infrastructure and private equity.

“With the Retirement Savings Account (RSA) amassing N23.26 trillion ($14.58 billion) as of February, 60 per cent is tied to government debt, and less than 10 per cent is in corporate securities. The move signals a strategic pivot from low-yield instruments to alternative assets with higher returns”,said Bismarck Rewane, Chief Executive of Financial Derivatives Company (FDC) Limited.

He said the shift is vital as Nigeria faces a staggering $878 billion infrastructure deficit by 2040, as estimated by Augusto & Co., with only 30 per cent of its 200,000 km road network paved, alongside deficits in bridges, schools, and utilities that continue to stifle economic growth.

Also, in a bold move to revitalize its logistics backbone, South Africa has announced plans to open its freight rail network to private investment by August 2025. This decision marks a pivotal shift in policy, aimed at reversing decades of neglect, underinvestment, and systemic vandalism that have crippled key export corridors. By embracing private sector participation, the country hopes to modernize its outdated rail systems, improve the reliability of goods movement, and ultimately boost trade, employment, and investor confidence.

Rewane notes that despite global uncertainties, Africa demonstrates notable resilience as foreign aid declines and trade tensions rise. According to Fitch Ratings, widespread credit downgrades are unlikely, thanks to the region’s limited exposure to global supply chains, which buffers many economies from external shocks. However, aid-dependent countries like Ethiopia, Mozambique, Uganda, and Lesotho remain vulnerable to project disruptions and rising fiscal pressures that could weaken their future credit ratings.

In response, African financial institutions are stepping up, playing a larger role in mobilizing domestic resources and supporting long-term development—part of a wider shift toward financial self-reliance. Still, trade-exposed economies such as Lesotho (100%), Madagascar (33%), Liberia (22%), South Africa (11.2%), Togo (12%), among other, face elevated risks from global market frictions, according to the Economist Intelligence Unit.

Meanwhile, Zambia is nearing final debt-restructuring agreements with key creditors, aiming to complete talks, especially with China, by the third quarter of 2025. The country has already secured deals with France and Saudi Arabia, covering about 90 per cent of targeted loans. Copper output and food self-sufficiency are expected to rebound following last year’s drought. Yet, despite these green shoots, Zambia remains at high risk of debt distress, with public debt ballooning to $28.7 billion (117.7% of GDP) in 2024, under the close watch of the IMF.