Dangote, Ramaphosa debate why Africa still struggles to fund power projects

• Aliko Dangote said money is available in African local markets but projects must be structured to attract funding.

• Cyril Ramaphosa argued that high interest rates and unstable currencies make power investments risky.

• Dangote said investors prefer using local currency first to reduce foreign exchange risks.

• Both leaders agreed that solving Africa’s power problems could boost jobs, businesses and government revenue.

A conversation ensued between Africa’s richest man, Aliko Dangote, and South African President Cyril Ramaphosa over why power projects across Africa still struggle to attract enough funding, despite claims that money is available within local markets.

The discussion happened during a panel session where both leaders spoke about financing infrastructure projects and the challenges facing renewable energy development across the continent.

South African President Cyril Ramaphosa argued that African countries often have funds available locally, but the major issue is making projects attractive and “bankable” enough for investors and financial institutions to support.

“Our experience has been that the money is there in the local market. And in fact, our complaint with the renewable power production is that quite a big chunk of that money has come from the local market rather than as a direct investment from outside,” Ramaphosa said.

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He added that investors are willing to put money into projects that are properly structured and capable of generating returns.

“It really revolves around the bankability of the project. The project is innovatively well-structured, and it's bankable. Banks in the local market can fund it. There is always money there,” he said.

However, Cyril's comments were challenged by Africa’s richest man, Aliko Dangote, who pointed out that while local banks may have money available, high interest rates remain a major barrier for businesses trying to finance large-scale projects.

Dangote also raised concerns about borrowing in foreign currencies, especially for countries where local currencies are unstable.

“Yes, there is money in the local banks. But if you really look at it, the interest rates are high,” Dangote said.

“Also, if you go and borrow money out there, you know, really, in Africa, in some countries, we don't have a stable currency. It is very dangerous for you to go and borrow money in dollars while your own generating machine is in Kwacha.”

The South African leader explained that governments need to create better conditions for power investments because improved electricity supply has a wider economic impact.

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“What they need to do is to make sure that they make the foreign exchange available. But it is much better if I'm going to invest in Nigeria, I would like to put my Naira first and then buy dollars so that I have to risk that currency exchange rate,” he said.

According to Dangote, solving Africa’s power challenges requires governments, financial institutions and investors to work together because increased electricity supply can boost businesses, create jobs and increase government revenue.

“Wherever you go and double your power, even your internally generated funds, that's government revenue, will increase, because you will now put a lot of people at work,” he added.

The debate highlights one of Africa’s biggest development challenges: while many countries have significant energy needs and investment opportunities, issues such as currency risks, high borrowing costs and project financing remain major obstacles.

Africa continues to face a huge electricity gap, with millions of people still lacking reliable access to power, making energy investment one of the continent’s biggest economic priorities.