Demand for housing seen creating $1.4trn investment opportunity by 2050

In the next two and a half decades, demand for housing in Africa is expected to create an estimated $1.4 trillion investment, which Akinwumi Adesina, president of the African Development Bank (AfDB), describes as “a unique investment opportunity that cannot be ignored.”

This opportunity is directly related to Africa’s growing population and rising urbanisation in most of the continent’s cities. In Nigeria, for instance, it is expected that by 2030, about 65 percent of the country’s 200 million population will live in the cities.

The continent’s population, according to Adesina, will double to reach 2.4 billion by 2050 which will be the same size as the combined population of China and India today.

He cited the New York Times which said that the world was becoming more African as 1 out of 4 people in the world by 2050 would be African.

Adesina, who spoke at the 2024 Africa Investment Forum (AIF) Market Days in Rabat, Morocco, highlighted Africa’s potential, noting that the continent’s food market was expected to grow to $1 trillion by 2030, while demand for infrastructure presents an annual investment opportunity of, at least, $170 billion.

“Africa presents such a unique investment opportunity which cannot be ignored. Don’t just believe me, believe the data,” he said, adding, “Population is destiny. Africa will brim with unparalleled demand for consumer goods and services, digital services, as well as housing, with the demand for housing expected to rise to an investment opportunity of $1.4 trillion.”

Adesina noted further that the size of Africa’s food and agriculture market would rise to $1 trillion by 2030, adding that demand for infrastructure presents an annual investment opportunity of at least $170 billion a year and these include energy, transport, digital infrastructure, water and sanitation.

Adesina, who also chairs Africa50, an infrastructure investment platform, disclosed that the Africa infrastructure acceleration fund launched by the platform has reached its first financial close with $500 million from 15 institutional investors.

According to him, a survey of asset managers by the Africa Private Equity Capital Association Survey for 2024 shows that 85 percent of Limited Partners expect to increase the allocation of private capital in the next two years.

He added that 52 percent of Limited Partners expect that private capital in Africa will be more attractive than other emerging markets in five years, pointing out that “we are seeing that attractiveness today, not five years.”

He revealed that the Alliance for Green Infrastructure (AGIA) launched by AfDB has garnered the support of the G7 to mobilise $10 billion for investment in green infrastructure in Africa.

“The AfDB’s launch of hybrid capital, the first ever by a multilateral development bank, with an issuance of $750 million was oversubscribed 8 times by $6 billion, a remarkable demonstration of investors’ confidence,” he enthused, saying that Africa has become a prime destination for investors seeking returns in the global energy transition boom.

He explained that Africa would be critical for the global energy transition, as it has large deposits of the critical minerals, adding, “Again, believe the data.”