African development banks set to expand lending as capital buffers rise, S&P says

S&P Global Ratings said African regional development creditors are poised to expand lending to fill national financing gaps, as capital buffers strengthen and new frameworks increase their borrowing headroom.

The ratings agency said Africa’s supranational lenders are increasingly central to plugging investment shortfalls and stabilising economies as external financing tightens. 

With climate and infrastructure funding dominating their pipelines, S&P expects regional creditors to take on a larger role through 2025.

In its October release of the Supranationals 2025 Special Edition, S&P said updates to its multilateral lending institution framework could lift risk-adjusted capital ratios by about 10%, potentially unlocking $600–$800-billion in additional sovereign lending capacity by development banks.

S&P uses the measure to judge how much more an issuer can safely lend without weakening its credit profile. A higher ratio means a stronger ability to absorb losses.

S&P identified the African Development Bank (AfDB), East African Development Bank, African Trade & Investment Development Insurance, and