By Shruti Menon Seeboo
The 9th Pension Funds & Alternative Investments Africa (PI Africa) 2026 conference, held against the backdrop of the serene Hilton Mauritius, served as a profound reminder that the narrative of African development is undergoing a fundamental shift from external dependency to internal mobilisation. Among the diverse voices of regulators, institutional investors, and policymakers, the insights provided by James Maduekeh, Senior Vice President and Head of Treasury Client Solutions at the Africa Finance Corporation (AFC), stood out as a roadmap for the continent’s financial evolution. As Africa moves towards a projected $7 trillion continental economy by 2035 under the auspices of the African Continental Free Trade Area (AfCFTA), the role of sophisticated treasury solutions in bridging the gap between idle institutional capital and critical infrastructure projects has never been more vital.
The prevailing discourse throughout the two-day summit centred on a startling and encouraging figure: African pension funds now manage in excess of $2 trillion in assets under management. This vast reservoir of capital represents a historic opportunity for the continent to self-finance its roads, bridges, energy grids, and digital networks. However, a persistent paradox remains. Despite the evident need for long-term infrastructure investment, many trustees and fund managers remain tethered to the perceived safety of government bonds. When questioned on what constitutes the ‘missing link’ in risk mitigation that would finally make large-scale infrastructure projects appear as safe, if not safer, than sovereign debt, Maduekeh was clear that the issue is not a lack of liquidity, but rather a deficit in the structural quality of available opportunities.
“I think one reoccurring theme in the conference is that we agree that for Africa to develop, we have to develop it ourselves. And one other fact is the fact that we don’t have a capital problem. The funds are already in the continent. We’re talking about over 1.2 trillion dollar worth of institutional funds. So the capital is there. Now, where the missing link is, is investable products. And that’s where institutions like AFC come. Part of what we do is we identify good projects, and then we put in development capital to develop on the risk, and crowd in private capital.”
This transition from raw capital to “investable products” requires a sophisticated layer of de-risking that moves beyond traditional project finance. At the heart of the AFC’s strategy is the removal of market volatility, which often acts as the primary deterrent for cautious institutional investors. By addressing interest rate fluctuations and commodity price swings through advanced hedging mechanisms, the AFC essentially creates a buffer that allows local capital to enter the fray with confidence. Maduekeh explained that the corporation leverages its strong investment-grade rating to execute these hedges back-to-back with international banks, ensuring the process is both cost-efficient and scalable.
“Part of that mix is also the risk in market risk. So, you know, to make projects viable and investable, we have to remove all the sort of market risk, volatility in the markets, you know, whether it is interest rates, commodity. We have to remove that. Remove that through hedging, and doing it back to back with international banks, because we don’t actually have market risk. And given our strong investment rating, we’re able to do that in a cost efficient and in a scalable manner. So we’re able to do duration hedging, et cetera.”
Once the underlying risk is addressed, the challenge shifts to packaging. Institutional investors are not a monolith; their mandates vary significantly across jurisdictions. Some are comfortable with derivative formats such as swaps, while others are restricted to more traditional loan or note formats. The AFC Treasury Client Solutions team focuses on this modularity, ensuring that the risk-adjusted returns are presented in a vehicle that fits the specific regulatory and fiduciary requirements of the investor. With a derivative book valued at approximately $5.5 billion, the AFC is actively working to crowd in private capital through risk participation and collateralised loan management.
“Now, once the project is at risk, we need to now have the ability to repackage this in a format that special funds, institutional investors can invest. Some institutional investors can invest in swap formats, which is in derivative format. Some would prefer loan formats or note formats. So, I think what is lacking is, you know, is, you know, being able to structure products that they can invest in. And that’s what Treasury Currency Institution and AFC does very well. We have a $5.5 billion worth of books, derivative books, where we do risk assets. And we try to crowd in private capital by, you know, through risk participation, through CLM and the likes. So, there’s a need to honestly do more of those products. And, you know, there’s a need for education. So, let venture fund asset managers to know that beyond trade repairs and bonds, there are other investment that are also equally rewarding from a financial standpoint, but also impactful for the continent.”
A significant portion of the hesitation from domestic funds stems from the inherent currency mismatch that plagues cross-border investments in Africa. A Kenyan or Nigerian pension fund, for instance, has liabilities denominated in its local currency, yet the debt used to finance major infrastructure projects is frequently denominated in US dollars or Euros. This exposure can lead to catastrophic losses during periods of currency volatility, effectively wiping out the returns of a project that is otherwise operationally sound. Maduekeh elaborated on how the AFC is innovating to solve this bottleneck, using its investment-grade status to provide a shield for local investors.
“Currency mismatch is a bottleneck for pension funds to scale in the continent. Because on one hand, you have local currency receivable, and you have to pay ad currency. So, what we do is we basically work with people for our projects. We work to identify the risk. And then, like I mentioned, with our investment-grade rating, we’re able to execute a back-to-back hedge through instruments like cross-currency swaps, non-deliverable forwards, where we eliminate the currency as a risk aspect and back it up to the international markets. So, if I take, for example, a cross-currency swap, that allows us to transform a local currency asset into a foreign currency asset. Because on the cross-currency aspect, AFC will assume the risk of the underlying local assets and then pay the client a return in USD. So, for that example, we basically work with our stakeholders to identify not just FX risk, interest rate risk, and eliminate it. There’s a challenge around turnover and pricing, but that’s also part of the case that we’re also working to use our investment-grade to make it affordable. And then, use our ratings to extend the turnover that we can offer in terms of hedges, compared to the fund managers being able to access it themselves because of the limitation around rating, etc.”
By assuming the risk of the underlying local assets and providing returns in a stable currency, the AFC allows fund managers to participate in projects that were previously considered too risky. The corporation acts as a sophisticated intermediary, using its institutional weight to make these protections affordable and accessible, thereby extending the tenors of available hedges to match the long-term nature of infrastructure. As the conference progressed, the conversation shifted toward the evolution of the AFC’s own business model. The corporation has recently seen equity investments from significant players such as Cameroon’s CNPS and SBM in Mauritius. This suggests a transition from being a traditional project financier into a primary platform for capital pooling.
“We had a breakfast meeting this morning where we sat with regulators, asset managers, sovereign wealth funds, etc. Part of that drive is to showcase what AFC has done in the last 19 years. We’ve been in the continent for the last 19 years, we’ve been investment-grade for the last 12 years, and recently we got our first rating from S&P, which was a multi-positive outlook. We also demonstrated some of the projects that we have invested in the continent, how impactful it has been, and showed the growth story. Our commitment is very clear to innovate, to structure, to risk participate, to mobilise institutional funds, but we cannot do it alone. That’s where equity comes in, that’s where pension funds come in. In the room, we’re saying, look, we’re a good platform to invest in. Rather than investing directly on single infra projects and carrying all the risk, you have a platform already that has a track record. You can invest in that platform and you have exposure for five member countries. Equity investment, expanding our shareholder base, is a very important part of our scaling as a business. Currently, majorly, we have governments and private institutions. We have our first non-regional shareholder, the Turkish government, that came in a year or two years ago. We’re looking for more partners, both non-regional and within the continent, to crowd in those investments and invest to our platform to enable us to scale and grow together.”
The strategic importance of Mauritius in this ecosystem cannot be overstated. As a member country of the AFC, Mauritius serves as a key hub for equity investment subsidiaries and a gateway for capital flows. Maduekeh noted the strong relationship with the Mauritian government and the protection and immunity the AFC enjoys within the jurisdiction. Yet, he was candid about the logistical and infrastructural hurdles that still impede the seamless flow of trade and human capital across the continent.
“First and foremost, Mauritius is a member country. We enjoy good relationships already with the government. We enjoy the immunity and the protection that we have here. Being a member country, it means that there’s avenue to collaborate. Both in Mauritius here and also providing market access to the rest of the African continent. From that aspect, we already have a good synergy in terms of collaboration. But like I said, for trade to flow, there are certain things that need to be addressed. For instance, the flow of human capital. To come to Mauritius, I have to travel all the way to Dubai. That’s like 11-12 hours. There’s no reason why we shouldn’t have direct flight from Lagos. The flow of infrastructure to allow trades to grow. It requires not just Mauritius, but the continents to collaborate to make that affordable. I think there’s still a lot of work to do in terms of trade flow. Mauritius is a good platform, good access to Africa and the rest of Africa. The question is how can they leverage a platform like AFC to access the rest of the continent.”
Despite being his third visit to the island, Maduekeh’s focus remained firmly on the takeaways from the technical sessions. He highlighted a shifting perspective on the very definition of infrastructure. While the AFC has built its reputation on “hard” assets, the conference underscored the critical nature of the digital frontier.
“I think the very first engagement with the Minister of Information was very insightful. I think for the first time, I view infrastructure from the lens of the digital space. It’s not just about roads and bridges, but being able to have strong digital infrastructure. In terms of digitisation, tokenization, we talk about this, it’s very critical. Viewing that from that lens was very insightful. Honestly, I’ve had very good exchange. It’s been a good networking time.”
Ultimately, the takeaway from Maduekeh’s insights at PI Africa 2026 is one of pragmatic optimism. The capital exists, the appetite is growing, and the institutional frameworks are being refined. The challenge for the coming decade will be to continue the work of education and innovation, ensuring that the trillions managed by African pension funds are not just preserved, but are actively deployed to build the sovereign strength of the continent. Through the AFC’s Treasury Client Solutions, the “missing link” is being forged, ensuring that the African growth story is written by African hands.
