African banks’ tier-1 capital trails single US lender, limiting infrastructure push

African commercial banks face a structural capital constraint that is increasingly shaping their ability to finance large-scale infrastructure projects, with total Tier-1 capital across the continent’s banking sector still trailing that of a single major US bank.

The issue was highlighted by Jeremy Awori, chief executive officer of Ecobank Group, during a panel session at the Africa We Build Summit organised by the African Finance Corporation (AFC) in Nairobi, Kenya, where global and regional development finance leaders discussed pathways to unlocking infrastructure capital for the continent.

Awori noted that despite Ecobank’s presence in 34 African countries, the banking sector remains significantly undercapitalised relative to global peers, limiting its ability to directly fund long-tenor infrastructure projects.

“All the Tier-1 capital of all the banks across Africa is less than one bank in the US or one bank in China,” he said, underscoring the scale mismatch that continues to constrain lending capacity across the continent.

He explained that while African banks are deeply embedded in local markets and play a critical role in corporate banking, SME financing, and retail services, their balance sheet structure and deposit maturity profiles make them unsuitable for long-term infrastructure financing at scale.

“As a commercial bank, we are not going to come in with billions of dollars for long-term projects because of the nature of our deposits being shorter term in nature,” he said.

Instead, he argued that infrastructure financing in Africa must increasingly rely on a blended ecosystem approach involving development finance institutions, capital market players, and risk-sharing partners.

“We come in and work with partners like AFC, AfDB, Afreximbank and others who can access long-term funding, while we provide the operational layer accounts, payments, SME support, and trade finance,” Awori said.

He added that unlocking Africa’s infrastructure potential will depend heavily on mobilising domestic institutional capital, particularly pension funds, to strengthen the continent’s banking system and expand lending capacity.

“Without capital, your amount of lending is constrained by your capital base,” he said, warning that Africa’s banking sector remains too small relative to the scale of financing needs.

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Other speakers at the session reinforced similar themes around risk-sharing, capital mobilisation, and blended finance structures.

Heike Harmgart, managing director for Sub-Saharan Africa, European Bank for Reconstruction and Development (EBRD), said infrastructure financing in Africa must shift from fragmented transactions to scalable pipelines of bankable projects, supported by consistent government frameworks.

“I think times in Africa are looking up. Global times are difficult, but what we’ve learned from this report (AFC report) is that the capital is there, the natural resources are there, and it just needs to come together.

We are the newest kid on the block, so we want to learn, but we also want to partner with all these eminent people on the panel. We are already partnering with Ecobank and Senegal, but we also want to partner with many in this room,” she said.

Khalid Ahmed, head of Private Sector Lending Operations, Arab Bank for Economic Development in Africa (BADEA), outlined ongoing commitments to mobilise billions of dollars for infrastructure, agriculture value chains, and private sector development across the continent.

Meanwhile, Manuel Moses, CEO, African Trade & African Trade & Investment Development Insurance (ATIDI), emphasised the role of credit guarantees and insurance mechanisms in “making capital comfortable” by transferring risk and enabling institutional investors to participate in African projects.

Christopher Olobo, CEO, Dhamana Guarantee Co, stressed that guarantees must be targeted at viable projects and used to address specific risks rather than substitute for weak fundamentals, warning against over-structuring that limits scalability.

Taken together, the discussions reflected a growing consensus that Africa’s infrastructure financing gap is less about absolute capital scarcity and more about balance sheet size, risk perception, and the architecture needed to mobilise domestic and global capital at scale.

The AFC-led summit framed this challenge as central to Africa’s development trajectory, with participants arguing that the continent’s future growth will depend on its ability to connect institutional savings, banking systems, and development finance into a unified investment framework capable of delivering large-scale infrastructure.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.