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Mo Ibrahim Foundation urges a paradigm shift in financing Africa’s development

• 1 Day Ago - 2025-07-02 00:00:00

Ahead of the Fourth International Conference on Financing for Development (FfD4) currently taking place in Seville, the Mo Ibrahim Foundation has called for a complete overhaul of how Africa’s development is financed.

The foundation’s latest research brief, titled FfD4 Cannot Be Business As Usual, sets out four key recommendations aimed at realigning global financing frameworks to better support Africa’s long-term priorities. The call to action follows extensive discussions held during the 2025 Ibrahim Governance Weekend and reflects growing concern over debt burdens, climate vulnerabilities, and underutilised domestic resources across the continent.

‘Africa’s agenda, not aid agendas’The foundation’s first recommendation is for international cooperation to be rooted in Africa’s development strategies, particularly the African Union’s Agenda 2063. Rather than impose external agendas, development partners are urged to align funding, policy support and climate finance directly with African-defined goals.

“This is about ownership,” said Mo Ibrahim, founder and chair of the foundation. “We must stop treating Africa as a charity case. Africa has a plan. It needs partners, not patrons.”

Aid frameworks, trade rules and debt restructuring mechanisms must be adapted to support integration, innovation and sustainability as laid out by African leaders, the foundation argues.

The second recommendation stresses the importance of harnessing Africa’s internal resources to fund its development.

According to the foundation, Africa could finance up to 90% of its development needs through improved tax collection, the formalisation of informal financial flows, and the curbing of illicit outflows.

Currently, African countries lose an estimated U$100 billion annually through tax evasion, profit shifting and other illicit financial activities. Tax-to-GDP ratios in Africa remain well below the global average, standing at approximately 15.6%, compared to over 33% in OECD countries. With better financial oversight, strategic reforms and institutional investment, Africa’s own capital could become the bedrock of its future growth, the Foundation said.

Adding value to natural assetsThe third pillar of the foundation’s call to action is a shift in how Africa’s natural resources are managed. It urges governments to move away from raw material exports and towards building value chains within the continent.

Instead of exporting minerals like lithium, cobalt or iron ore in unprocessed form, the report recommends investments in local manufacturing and refining capabilities. Africa’s biodiversity and carbon-rich ecosystems, meanwhile, offer opportunities to tap into the growing global market for carbon credits and climate finance.

“The continent holds a third of the world’s critical minerals and vast untapped green assets,” the report states. “But until it adds value locally, its natural wealth will continue to benefit others more than Africans.”

The African Continental Free Trade Area (AfCFTA) was cited as a crucial opportunity to create regional value chains, stimulate intra-African trade, and build resilience against external shocks.

Attracting private capital

Finally, the foundation highlights the urgent need to improve the investment climate across the continent. While global capital is available, Africa remains marginalised in global financial decision-making and is often seen as high-risk by investors.

The report calls for an overhaul of the international financial architecture, including fairer lending terms, better risk assessment, and greater African representation in global institutions. At the same time, African countries must strengthen their domestic policy environments through anti-corruption reforms, improved legal frameworks, and transparent governance.

“There is no shortage of capital in the world,” said Mo Ibrahim. “The question is: do we make it safe, fair and worthwhile for it to come to Africa?”

To encourage sustainable investment, the foundation also advocates for greater support for small-scale projects with high social and environmental returns, particularly in agriculture, renewable energy, and digital infrastructure.

Shifting the narrative

At the heart of the foundation’s position is the idea that Africa does not need “more money”, but “smarter money”.

Instead of increasing aid, the report emphasises that more effective use of Africa’s existing wealth, when combined with strategic global partnerships, could finance the continent’s transformation.

“Africa is not poor,” said Ibrahim. “It is poorly managed and poorly financed. With good governance, we can change that.”

The report also warns against Africa’s rising debt levels, which have tripled since 2009 and continue to strain public finances. As many countries approach or exceed debt distress thresholds, the Foundation says new approaches are needed that prioritise long-term sustainability over short-term borrowing.

With the FfD4 conference underway, the Mo Ibrahim Foundation is urging global leaders to take bold action.

Its recommendations that Africa’s goals be embedded into global policy, domestic revenue maximised, that local value from natural resources be developed, and the environment for investment be improved, form a roadmap for what the foundation calls a “new deal” for Africa.

“The time for talk is over,” Ibrahim said. “The future of our continent cannot depend on broken systems and outdated frameworks. Seville must deliver real change.”

The foundation’s message is clear: Africa must no longer be treated as a passive recipient of development. With the right financial tools, political will, and international support, it can chart its own path towards inclusive, sustainable growth.

- Mo Ibrahim Foundation