Africa’s investment challenge isn’t about opportunity; it’s about perceived risk. This was the major takeaway from a Moonshot panel on Wednesday, October 15, where industry leaders discussed how government-backed guarantees could transform the continent’s infrastructure and impact-investing landscape.

“Financing local infrastructure in local currency is a very challenging endeavor primarily because of inflation, which makes it hard to do business in our currency,” said Fola Fagbule, Deputy Director and Head of Financial Advisory at the Africa Finance Corporation (AFC). “The government and other large financial institutions make these guarantees to make these investments more profitable to foreign investors. A guarantee is very powerful if used properly.”

Institutional capital remains cautious. Infrastructure, energy, and tech-focused projects still struggle to secure funding not because they lack viability, but because investors view the risk unfavourably. That is where blended and de-risking mechanisms become critical. Rather than governments shouldering the entire project cost, guarantee structures allow public institutions to absorb specific risks such as political instability, currency fluctuations, and regulatory changes that private investors cannot easily manage. This approach encourages private investors that would otherwise stay on the sidelines.

“We’re in a volatile macroeconomic environment,” said Osaze Osaghae, Deputy Head of Origination and Structuring at InfraCredit. “If infrastructure projects based in Nigeria were funded by Nigerians, it would be more sustainable. Most infrastructure projects are revenue-generating in Naira, and projects like railways take 10 years to really see the rewards. That’s why we need more guarantors to take on risk and provide channels for these long-term projects to raise funding from the debt capital markets.”

Beyond financial instruments, panellists underscored that trust and transparency matter just as much. “A lot of blended finance tools like low-interest loans or results-based financing are linked to measurable social impact outcomes,” added Rolake Osiji, Regional Director for Africa at Seedstars. “If you’re seeking catalytic finance from development finance institutions, make sure your impact data is accurate and visible. That’s how you attract serious capital.”

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