African countries have been urged to make greater use of domestic financial resources, including pension, insurance and sovereign wealth funds, to finance critical development projects and reduce vulnerability to fluctuations in foreign aid.
Development and policy experts said stronger domestic capital markets could provide African countries with a more sustainable source of funding for sectors such as health, education, roads and agriculture.
The call comes amid a sharp decline in international development assistance, with Organisation for Economic Co-operation and Development (OECD) data indicating that Official Development Assistance (ODA) fell by 23.1 per cent to US$174.3 billion in 2025.
The International Monetary Fund (IMF) has also reported that bilateral aid to sub-Saharan Africa declined by 26.3 per cent in 2025, increasing financing pressures on low-income countries.
The experts spoke exclusively to the Ghana News Agency on the sidelines of the third Commissioners’ Meeting of the Future of Development Cooperation Coalition (FDCC) in Accra.
The meeting brought together stakeholders to discuss reforms to the global development finance architecture and ways of improving financing outcomes for Africa.
The Head of the FDCC Secretariat, Ms Alexia Latortue, said the decline in aid, coupled with higher global interest rates, had exposed the risks associated with excessive dependence on external financing.
She noted that several African countries that accessed international capital markets when borrowing costs were low were now facing significantly higher debt-servicing costs as global interest rates increased.
Ms Latortue, a former US Treasury Assistant Secretary, said the resilience demonstrated by several African economies showed that the continent had the capacity to mobilise and manage domestic resources more effectively.
She said stronger economic management, deeper local financial markets and the building of financial buffers over the past two decades had helped some countries withstand external shocks.
President and Chief Executive Officer of the African Centre for Economic Transformation (ACET), Ms Mavis Owusu-Gyamfi, said Africa’s development financing strategy should begin with strengthening domestic economies.
She described the approach as “take care of your own house first”, involving better economic management, increased domestic savings and the creation of financial buffers.
“By doing so, Africa can negotiate with the rest of the world from a place of strength, telling partners here is what we are doing, here is where we want to go, and here is the partnership we want,” she said.
Ms Owusu-Gyamfi cited Ghana’s former “Ghana Beyond Aid” agenda as an example of the need for countries to strengthen their capacity to finance essential public services from domestic resources.
She said health, education and road infrastructure should increasingly be supported by domestic revenue and capital mobilisation rather than relying heavily on unpredictable external assistance.
Vice President and Senior Policy Fellow at the Centre for Global Development (CGD), Ms Clemence Landers, said Africa’s changing financing needs required a broader conversation about the continent’s place in the global financial system.
She said discussions should move beyond aid to include trade, domestic capital mobilisation, remittances, illicit financial flows, risk perceptions and access to affordable finance.
According to her, Africa’s absence from global negotiations could result in discussions being overly focused on aid while overlooking other financing mechanisms capable of supporting economic transformation and job creation.
Ms Landers also called on African banks and other private-sector institutions to increase lending to small and medium-sized enterprises (SMEs), which she identified as important sources of employment for the continent’s growing youth population.
She further stressed the need for stronger accountability in the management of both domestic and external funds.
She said all development financing should be reflected in national budgets and be traceable to enable citizens to monitor how public resources were being used and hold governments accountable.
The FDCC and ACET are expected to channel recommendations from the Accra meeting to key international and African institutions, including the G20 Common Framework, IMF, World Bank, private creditors and African development institutions.
The recommendations are expected to contribute to discussions on reforms aimed at making the international financial system more responsive to Africa’s development and financing needs.
