Africa’s Infrastructure Gap Is Huge. Not Every Project Is Investable.

By Ajay Wasserman

Africa’s infrastructure shortfall is staggering, and the temptation to treat every road, power plant, or water system on the continent as an automatic investment opportunity is understandable. It is also a mistake.

The African Development Bank puts the continent’s annual infrastructure investment need at somewhere between US$130 billion and US$170 billion, with a financing gap of US$68 billion to US$108 billion. These figures, cited endlessly in investment decks and donor reports alike, are impressive enough to attract capital on their own. But they measure something narrower than most people assume: unmet need, not investment readiness. A yawning financing gap tells you nothing about whether a given project has a credible payer, an enforceable contract, or a realistic path to cash flow.

That gap between need and bankability is exactly where good projects go to die.

Four Questions Every Investor Should Ask First

Before mistaking a shortage for a thesis, serious investors should demand clear answers to four questions:

1. Who actually pays for the service – a government, a utility, an employer, a business, or the end user?
2. Is that payment obligation contracted and collectible, not just today, but through political turnover and economic downturns?
3. Are revenues, debt, and imported inputs currency-matched, so a devaluation doesn’t quietly wipe out the margin?
4. Can the operating partner actually maintain the asset once the ribbon-cutting photos have been taken and the cameras have gone home?

A road, a clinic, a power plant, a water system, or a digital network can be socially indispensable and still be financially unbankable in its current form. Those two facts are not in tension – they simply demand different responses.

Redesign the Deal, Don’t Abandon the Need

The right response to an unbankable-but-essential project is not to walk away from it. It’s to rebuild the capital stack so that risk sits with whoever is best equipped to carry it, and to structure the deal around how the market actually behaves – not how planners wish it would.

That means being honest about what each type of capital is for. Public and concessional funding should absorb the early-stage and policy risks that commercial investors reasonably won’t touch. Commercial capital, in turn, should be compensated only for risks it can genuinely underwrite – not asked to quietly subsidize sovereign or currency exposure it has no tools to manage. And local ownership needs to mean more than a ceremonial stake on a cap table; it has to extend into execution, accountability, and real economic participation.

“Patient capital” is a phrase that gets used to justify a lot of sloppy underwriting. It shouldn’t. Patience and discipline are not opposites – the best infrastructure investors practice both at once.

The Opportunity Is Real – But It Isn’t Automatic

Africa’s infrastructure deficit remains one of the most significant investment opportunities of this generation. That much is not in dispute. But the opportunity doesn’t begin with the size of the gap. It begins the moment need, delivery, and payment are locked together into one durable, self-sustaining system.

Until then, what looks like an investment case is often just a wish list with a price tag attached.

Ajay Wasserman is the Group CEO and Chief Investment Officer of Fio Capital Group, a private family office and investment holding company based in Pretoria. Focused on empowering entrepreneurs and fostering sustainable growth, he believes the future success of global economies depends on the innovation and leadership of private entrepreneurs and businesses.