Wasim Tahir made this case in Episode 8 of the RootsToFoods Capital Series, published on 13 October 2026. He is a Senior Adviser at ODI Global Advisory and a Research Fellow at the Harvard Center for International Development. He also spent six years at British International Investment, serving as Director of Private Capital Mobilisation.
His argument is direct. Development finance can draw private investors into emerging markets. It cannot replace domestic financial systems. Over time, African savings must fund more local companies, infrastructure projects and productive assets.
Why Africa capital markets matter to investors
Tahir describes private capital as a spectrum. Government and philanthropic grants sit at one end. Return-seeking investment sits at the other. Development finance occupies the middle, blending financial returns with development objectives.
As aid budgets contract, development finance institutions need private investors to maintain their reach. British International Investment responded by shifting from a buy-and-hold model to an originate-to-share approach.
That model allows a development lender to sell mature assets and recycle capital into new deals. Tahir noted that such institutions can lend for seven to ten years, while commercial lenders often extend only four or five.
Tahir led BII’s first secondary loan sale to an institutional investor, mobilising US$30 million in private capital. The approach creates a clearer pipeline for pension funds, insurers and other long-term investors. Mature loans offer a different risk profile from early-stage construction projects.
‘Domestic savings will determine whether Africa can finance its next investment cycle.’
What does the shift mean for investors?
Tahir argues that guarantees and blended finance can target specific barriers. A partial-loss guarantee, for example, can encourage a local bank to lend to smaller businesses. However, these tools cannot cover every financing gap.
Concessional capital remains limited. Many markets still need stronger rules, better infrastructure and more liquid instruments. The durable answer is deeper domestic capital markets.
Banks, pension funds and insurers already hold savings that could support local infrastructure and businesses. More efficient markets could also reduce reliance on external financing, according to the UN Economic Commission for Africa.
Industry data from FSD Africa shows that African domestic equity markets grew 27-fold since 2000, reaching approximately US$561 billion. Even so, Africa’s share of global capital-market activity remains well below its economic weight.
National development banks and Gulf capital
National development banks form another part of the financing model. Tahir also points to the Africa Finance Corporation as a model for Africa-focused multilateral lending.
Gulf investors are also becoming more important to African financing flows. Their appetite for infrastructure and real assets aligns well with the continent’s investment pipeline.
For institutional investors, the opportunity lies beyond individual transactions. Stronger local markets improve exit options, broaden funding sources and open investable channels for domestic institutions. Policymakers and fund managers should watch market liquidity, local-currency instrument growth and the expansion of national development banks in the months ahead.
Quick answers
The originate-to-share model allows a development lender to issue loans, then sell mature assets to institutional investors and recycle that capital into new transactions. British International Investment adopted this approach to mobilise more private capital.
FSD Africa data shows African domestic equity markets grew 27-fold since 2000, reaching approximately US$561 billion, though Africa’s share of global capital-market activity remains below its economic weight.
Concessional capital is limited and aid budgets are contracting. Wasim Tahir argues that deeper domestic capital markets — drawing on local bank deposits, pension funds and insurers — are the durable long-term solution.
