Ghana could gain from African development banks lending boost
By Nii Trebi Hammond
African development banks are set to significantly increase lending as stronger capital buffers and new risk management frameworks create billions in additional financing capacity, according to a new report by S&P Global Ratings.
In its ‘Supranationals 2025 Special Edition’ released in October, the ratings agency revealed that improved balance sheets among regional multilateral lenders could lift their risk-adjusted capital ratios by around 10 per cent, creating an estimated USD600–USD800 billion in extra lending space.
Analysts say this development could help close Africa’s widening infrastructure and climate financing gaps while also attracting new private investment partnerships across the continent.
S&P identified the African Development Bank (AfDB), East African Development Bank (EADB), African Trade & Investment Development Insurance (ATIDI), and the Arab Bank for Economic Development in Africa (BADEA) as the key players driving this trend.
The AfDB, which continues to maintain its AAA credit rating, grew its portfolio to USD27.3 billion in 2024 and has signalled plans to scale up both sovereign and private-sector lending in the years ahead. BADEA has increased its exposure to USD3.8 billion and is targeting disbursements of about USD18 billion between 2025 and 2029.
S&P noted that innovative financing tools such as hybrid capital issuance and exposure-exchange agreements, which allow banks to share risk and diversify their portfolios, have strengthened the resilience of African lenders amid tight global monetary conditions.
Overall lending by multilateral development institutions rose by 4 per cent between 2021 and 2024, with Africa accounting for nearly one-fifth of total disbursements during that period.
Economists believe the rising financial strength of regional development banks could have direct benefits for economies such as Ghana, where access to international capital markets has tightened in recent years due to higher global interest rates.
“Stronger development banks mean stronger pipelines for African businesses. If these funds are efficiently channelled, we could see renewed momentum in infrastructure, energy, and SME financing,” said a regional economist in Accra.
