Get Guardian on GoogleBritish International Investment (BII), the United Kingdom’s development finance institution, has earmarked £2.25 billion ($3 billion) for Africa’s frontier markets and least-developed countries over the next five years, targeting economies struggling to attract private investment.
The allocation represented 25 per cent of BII’s planned £9 billion investment in Africa between 2026 and 2031 and formed part of its new strategy to expand financing for infrastructure and productive sectors.
According to Bloomberg, the institution will work with local partners to strengthen financial markets and address barriers preventing capital from reaching businesses and infrastructure projects.
BII Chief Executive Officer, Leslie Maasdorp, said many African countries remained excluded from the investment criteria of major global asset managers because of poor credit ratings or the absence of sovereign ratings.
“We are very realistic and recognise that we’re not going to get BlackRock to come and invest in Burundi or in the Democratic Republic of Congo,” he said, explaining the decision to commit a substantial share of the institution’s African funding to underserved markets.
Under the strategy, BII plans to provide £5 billion directly and mobilise another £4 billion from partners, primarily for infrastructure investment. Priority areas include power generation, ports, railways and digital infrastructure such as telecommunications towers and data centres.
The institution also planned to expand financing for manufacturing, financial inclusion and businesses involved in electric mobility.
The investment push comes as African manufacturers continue to face high production costs arising from inadequate infrastructure, unreliable electricity and limited access to affordable long-term finance.
Increased investment in power, transport and digital infrastructure could help lower operating costs, improve logistics and strengthen the competitiveness of locally manufactured goods.
BII’s regional director for East Africa, Seema Dhanani, said financial services would remained central to its investment portfolio, with banks providing an effective channel for reaching underserved businesses.
“Banks give us scale and they also give us reach, but we’re able to really tailor the transactions to hit target sectors of the market,” she said.
She identified small and medium-sized enterprises, agriculture, women-owned businesses and climate finance as priority areas for investment through banking partnerships.
For Nigeria, the strategy presents an opportunity to attract more development finance into manufacturing, infrastructure and smaller businesses that struggle to secure long-term capital for expansion, equipment and working capital.
Across Africa and its other markets, BII has set a total investment target of £15 billion over the five-year period. The success of the programme will depend on how effectively the funding translates into productive investment, expanded manufacturing capacity, stronger local supply chains and jobs across the continent.
