Despite its abundant natural resources, excellent conditions for renewable energy generation, and young population, Africa’s economic potential remains largely untapped, with infrastructure investment holding the key to unlocking both current opportunities and long-term prosperity. These are the key findings of From Riches to Returns, a new report released by Dentons.

The report highlights the transformative potential of the African Continental Free Trade Area (AfCFTA), which could become the world’s largest free trade zone, driving an estimated 50% increase in demand for road, rail, maritime, and air transport.

However, Dentons warns that infrastructure gaps, particularly in transport and energy, remain a critical bottleneck. Approximately 80% of African businesses (excluding those in North African countries and South Africa) experience power outages, compared to 66% in South Asia and just 38% in Europe. To fill this void, Africa needs an annual investment of between US$130 billion and US$170 billion. Without it, development will stall.

“Africa faces a critical juncture where its pressing needs surpass the flow of inbound investment,” said David Syed, Head of the Europe Sovereign Advisory Practice at Dentons. “To secure a sustainable future, governments, investors, and innovators must work together to address challenges like energy insecurity and climate change. With the right actions, Africa has the potential to become a driving force in global growth and innovation within the coming decades,” he added.

While sovereigns play a key role in infrastructure, meeting the current needs and realising the ambitions of the AfCFTA and the continent at large will not be possible without the private sector. The report identifies renewable and conventional energy, critical minerals, and green hydrogen as high-potential sectors that offer massive growth opportunities for international investors and could attract the capital African nations need to fuel their development.

“Europe leads the way as the most important source region for investment in Africa, while emerging powers such as the UAE, China, and India are ramping up investments, particularly in key sectors like renewable energy and carbon markets, areas where the continent holds vast, yet largely untapped, potential,” noted Yun Ma, Co-Head of the Europe Sovereign Advisory Practice at Dentons.

Nevertheless, achieving long-term success in Africa’s development will require more than just financial investment. As per the study, it will demand ongoing reforms in legal frameworks and governance, creating an environment of stability and trust that encourages sustainable economic development. 

Furthermore, the report finds that Africa could significantly increase its prosperity by moving up the value curve from the extraction of oil and critical metals to processing and refining as well as the manufacture of finished goods.

Noor Kapdi, Chairperson of Dentons’ Africa Region, commented, “For Africans to profit in a meaningful way from the continent’s natural riches, more added value must be generated in Africa. This means investing in domestic industrial capacity, to boost the processing and production of higher value goods, while also creating millions of jobs.”

Dentons’ report concludes with a call to action for potential investors to recognize and adapt to Africa’s evolving economic and political landscape, urging them to embrace strategic investments that could catalyse the continent’s long-term potential.

The report is available for download here.

Dentons’ Sovereign practice represents governments, sovereign wealth funds, and state-owned enterprises on complex finance transactions, transformation and litigation. The practice focuses on finance and corporate transactions, including high-value complex cross-border transactions, privatisations and transformation projects across many industry sectors including energy, mining, transportation, infrastructure and telecommunications.

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