AfDB: Demand for housing in Africa will create $1.4trn investment opportunity by 2050

Akinwumi Adesina, president of the African Development Bank (AfDB), says Africa presents a unique investment opportunity that cannot be ignored.

Adesina spoke at the opening ceremony of the 2024 Africa Investment Forum (AIF) Market Days on Wednesday in Rabat, Morocco.

Highlighting Africa’s potential, he said the continent’s food market is expected to grow to $1 trillion by 2030, and 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.

“The New York Times said that the world is becoming more African, as 1 out of 4 people in the world by 2050 will be African.

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

“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.

“The size of Africa’s food and agriculture market will rise to $1 trillion by 2030. Demand for infrastructure presents an annual investment opportunity of at least $170 billion a year, from energy to transport, digital infrastructure, water and sanitation.”

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

“A survey of asset managers by the Africa Private Equity Capital Association Survey for 2024 shows that 85% of Limited Partners expect to increase allocation of private capital in the next two years,” he said.

“Also, 52% of Limited Partners expect that private capital in Africa will be more attractive than other emerging markets in five years’ time.

“We are seeing that attractiveness today, not five years.

“The Alliance for Green Infrastructure (AGIA) launched by the African Development Bank has garnered support of the G7, to mobilise $10 billion for investment in green infrastructure in Africa.

“The African Development Bank’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.”

‘AFRICA IS A PRIME INVESTMENT DESTINATION FOR GLOBAL ENERGY’

Adesina said Africa has become a prime destination for investors seeking returns in the global energy transition boom.

“That’s because Africa will be critical for global energy transition, as it has large deposits of the critical minerals. Again, believe the data,” the president said.

“Africa holds 95% of chromium, 90% of Platinum Group Metals, 2/3 of global reserves of cobalt, 30% of lithium and manganese, and 20% of graphite—all of which are key for green transition, from electric vehicles to battery energy storage systems.

“The size of the electric vehicle and battery energy storage systems will rise from $7 trillion in 2030 to $59 trillion by 2050.

“Africa, which currently serves as a supplier of raw minerals, has a unique opportunity to move up the critical minerals value chain, with investments in critical minerals value-adding industries.

“Take for example that the development of lithium-ion precursor battery plant in Democratic Republic of Congo will be 3 times less expensive than in the United States of America, China or Poland, according to Bloomberg NEF report.”

Adesina emphasised the need for investors to support Africa’s ambition of becoming a green energy power hub for the world.

‘AFRICA IS NOT AS RISKY’

The AfDB president said Africa is not as risky as many perceive, citing data to support his arguement.

“Default rates were 1.9% for Africa; 6.6% for North America; 10.1% for Latin America; 12.4% for Eastern Europe; 4.6% for Western Europe and Asia, respectively,” he said.

“The Africa Investment Forum goal is to help investors take informed investment decisions on projects in Africa.

“Our purpose remains the same: match investors with opportunities; mobilise capital; and accelerate financial closure for projects.

“The Africa Investment Forum has a strong record. In the past 5 editions, it has mobilised $180 billion of investor interests to Africa.

“It has fully closed transactions worth $30 billion and continues to fast-track a lot more to financial closure.”

Adesina praised AIF and its staff for their efforts, saying AIF partners originated deals worth over $15 billion—a record achievement — in 2024.