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African multilateral development banks (MDBs) must expand their financial capacity and align with the continent’s economic transformation agenda to bridge persistent funding gaps, experts said at a high-level panel during the Economic Commission for Africa (ECA) Conference of African Ministers of Finance, Planning, and Economic Development (COM2025).
The panel, themed “The Role of Sub-Regional Multilateral Development Banks in Delivering on Africa’s Development Objectives,” brought together top financial and policy experts in Addis Ababa, Ethiopia to discuss how MDBs can mobilize resources, attract private investment, and drive regional integration.
Hanan Morsy, ECA’s Chief Economist and Deputy Executive Secretary, warned that the tightening of global financial conditions and declining development aid required MDBs to play a more active role in Africa’s economic strategy.
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“Sub-regional MDBs must be empowered to mobilise long-term resources and provide affordable financing. Without strong, well-capitalised development banks, Africa will struggle to finance its own growth,” Morsy said in a statement issued in Lusaka on Sunday.
She further called for reforms to the global financial system, arguing that the current structure disadvantages African MDBs.
“We need a fairer international financial architecture. MDBs must have better access to concessional funding, and Special Drawing Rights (SDRs) must be reallocated to strengthen their capital base,” Morsy added.
She said: “MDBs must evolve beyond traditional lending. They need to embrace blended finance, leverage private sector capital, and develop innovative instruments to sustain Africa’s growth momentum.”
Admassu Tadesse, President and Chief Executive Officer of the Trade and Development Bank, stated that Africa’s development goals, particularly the African Continental Free Trade Area (AfCFTA), cannot be achieved without major infrastructure investments.
“One of the biggest obstacles to intra-African trade is inadequate infrastructure. MDBs must finance transport corridors, energy projects, and digital connectivity to unlock trade and industrialization,” Tadesse stated.
Fatima Elsheikh, Secretary General of the Arab Bank for Economic Development in Africa (BADEA), said structural weaknesses limit MDBs’ ability to scale up financing.
“The reality is that many sub-regional MDBs are heavily reliant on low-income shareholders and have limited callable capital. High borrowing costs also restrict their ability to lend at competitive rates,” she said.
Elsheikh urged governments to strengthen MDBs’ financial base to ensure they can meet Africa’s growing economic needs.
The panelists also stressed that MDBs must align with Agenda 2063 and the 2030 Sustainable Development Goals (SDGs) to deliver long-term, inclusive growth.
They called for agile financing mechanisms and deeper partnerships with global development finance institutions to maximise impact.
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