By Onu Okorie

 The African Development Bank will inject $125 million into the African Trade and Investment Development Insurance agency, making it the institution’s largest shareholder in a bid to dramatically scale up guarantees and draw private capital into the continent’s underfunded infrastructure, AfDB President Sidi Ould Tah told Reuters.

The move will lift the bank’s stake in Nairobi-headquartered ATIDI from 3% to 14%, eclipsing the agency’s traditionally dispersed ownership base of 24 African member states and institutional investors. Tah, who took the helm of Africa’s largest development lender last September, said the investment is central to his broader financing strategy as development aid from wealthy nations fell nearly a quarter last year to $174.3 billion — a decline led by steep cuts from the United States, including to the AfDB’s own concessional arm.

“Our target is to bring the level of guarantees provided by ATIDI to 10 billion dollars annually and reach a target that will really unlock huge potential for financing infrastructure at scale,” Tah said following the bank’s annual meeting in Brazzaville last week.

ATIDI was established 25 years ago to de-risk investment in Africa through insurance and guarantees, helping channel private capital into higher-risk markets. It has historically covered an average of $3 billion in investments per year — a figure the AfDB now wants to more than triple.

The capital injection is part of a sweeping initiative Tah calls the New African Financial Architecture for Development, or NAFAD. The strategy aims to mobilize an estimated $4 trillion sitting in Africa’s fragmented institutional capital pools — pensions, sovereign wealth funds, and savings schemes — to address an annual development financing gap estimated at $400 billion.

The bank is actively courting additional shareholders. Germany’s KfW Development Bank joined ATIDI’s ownership structure as recently as April, and France is reportedly considering increasing its own stake, with further details expected at a G7 meeting in Evian later this month.

“We are also talking to various financial institutions and many countries to increase their contribution or to contribute if they are not yet shareholders,” Tah said.

Not everyone is convinced the guarantee-led approach is sufficient. Some analysts argue that African nations must first focus on building domestic savings pools, pointing out that Sub-Saharan Africa’s savings rate hovers around 18% — less than half the global average — held back by low incomes and a predominantly young population, according to World Bank data. Tah pushed back on that skepticism, insisting the bank is equipped to meet the region’s financing challenges head-on.