Nigeria has the potential to unlock significant funding for national development by making better use of pension funds, sovereign wealth assets, and other domestic investment resources, according to the Chief Economist and Vice President for Economic Governance and Knowledge Management at the African Development Bank (AfDB), Prof. Kevin Urama.
Speaking in an interview, Urama explained that Africa already has access to large pools of long-term capital through institutional investors. He revealed that institutional investors across the continent currently manage assets worth approximately $4 trillion. However, only a small portion of these funds is being directed toward development projects that can boost economic growth and improve living standards.
According to him, Nigeria is in a strong position to benefit from these resources due to the strength of its banking sector, pension industry, sovereign wealth fund, and expanding financial services sector. He noted that with the right policies and investment structures, the country could channel more local capital into sectors that drive productivity and economic expansion.
Urama stressed the need for government-backed frameworks that would allow development banks, pension fund administrators, commercial banks, and other financial institutions to invest more effectively in critical sectors of the economy. These sectors include infrastructure, agriculture, healthcare, education, manufacturing, and other areas that can generate jobs and support sustainable growth.
He explained that when domestic investors actively participate in development financing, it sends a positive signal to international investors. As a result, foreign investors are more likely to join as partners in major development projects, bringing additional funding and expertise.
The AfDB economist linked this strategy to the New African Financial Architecture for Development (NAFAD), an initiative designed to strengthen cooperation among African financial institutions. The framework aims to improve the continent’s ability to mobilize, manage, and deploy large-scale capital for economic transformation.
Urama also highlighted the important role of Africans living abroad in supporting development efforts. He noted that remittances to Africa reached about $104.8 billion in 2024, making diaspora funds one of the continent’s most valuable financial resources.
He suggested that governments and financial institutions should create structured investment products that encourage members of the African diaspora to invest directly in productive sectors. Such investments could help finance infrastructure projects, agricultural development, healthcare improvements, educational programs, and other areas that contribute to long-term economic progress.
In addition, Urama called for stronger engagement with wealthy Africans and high-net-worth individuals. He said many of these individuals control substantial financial resources that could be invested locally if there are effective investment opportunities and mechanisms to reduce risks.
He concluded that deeper capital markets, stronger financial institutions, improved governance, and sound risk-management systems are essential for attracting long-term investment. These measures, he said, would help Nigeria and other African countries mobilize more local resources and accelerate economic transformation while reducing dependence on external funding.
