Africa's governance crisis threatens millions of jobs and economic opportunity

AFRICA’S GOVERNANCE GAP STANDS BETWEEN CONTINENT AND NEXT WAVE OF INVESTMENT

Millions of Africans stand to gain, or lose, depending on whether the continent’s governments and businesses can close a governance gap that is quietly blocking the investment needed to build industries, create jobs, and expand access to financial services. That was the consistent message at the fourth DLO African Women in Leadership Summit, held in Sandton on Wednesday, where investors, executives, entrepreneurs and policymakers gathered under the theme “Connecting Capital to Opportunity Across Africa.”

The summit’s central finding was blunt: Africa does not lack money. It lacks the institutional clarity and policy stability that would allow capital to flow toward the communities and industries that need it most.

Horatius Maluleka, investment executive at Ninety One, challenged the familiar narrative that Africa is simply too difficult to invest in. The real problem, he explained, is that the continent is treated as a single market despite the fact that each country operates under different economic and political conditions. This lumping together of vastly different environments makes it nearly impossible for investors to price risk accurately, and ordinary citizens pay the price when investment fails to arrive.

“I don’t think the continent is uninvestable. The challenge is how we price risk consistently across the continent,” Maluleka said. He pointed out that Nigeria’s investment landscape bears little resemblance to Rwanda’s, just as South Africa’s differs markedly from many neighbouring economies. Treating these as interchangeable obscures real opportunities and, more importantly, delays the jobs and services that investment would generate.

The structural barriers run deeper than policy uncertainty. Maluleka outlined what institutional investors require before deploying capital: strong governance frameworks, independent boards, audited financial statements, and transparent business structures. Without these, even promising companies, and the communities they could employ, remain underfunded.

“Capital flows to structures. If investors cannot understand how your business is run, they are unlikely to commit their money,” he said. Africa has no shortage of entrepreneurial energy, he noted, but many businesses remain unfunded because they are not organized in ways that institutional investors can evaluate.

Access to African investment opportunities also remains out of reach for ordinary retail investors. While major institutions like Ninety One already channel billions into the continent through carefully designed products, more work is needed to create vehicles that allow smaller investors to participate in African growth.

The governance challenge extends directly to how financial institutions assess creditworthiness, with particular consequences for women entrepreneurs. Many women remain locked out of traditional lending because collateral-based models penalize those with limited asset accumulation. This is not a failure of borrowers. Maluleka argued that women have demonstrated strong repayment records even without substantial assets, and that the problem lies with outdated assessment methods.

“What needs to change is the way credit is measured,” he said. The practical effect of that change would be felt by thousands of women-led businesses currently unable to access the capital they need to grow and hire.

Meanwhile, Dr Hassan Mahmud, chief economist at Dangote Industries Limited, brought the discussion to industrialisation, one of Africa’s central long-term development goals. African countries have spent decades discussing industrial development but made limited progress because governments and private sector actors have failed to coordinate effectively. Investors will not commit to multi-generational industrial projects without confidence in stable, transparent and predictable policy environments, and without those projects, the manufacturing base that could lift living standards across the continent remains out of reach.

“Industrialisation is a generational investment and it cannot depend on short election cycles. Investors need transparent, stable and predictable policies,” Mahmud said. Governments, he argued, must focus on foundational conditions: consistent economic policies, upgraded infrastructure, efficient payment systems, and clear regulatory frameworks. These are not abstract institutional concerns. They determine whether citizens gain access to reliable electricity, affordable goods, and stable employment.

Pontsho Mokoena, chief risk officer at Dangote Industries, reframed how businesses should approach risk itself. The most successful companies are not those that eliminate risk but those that navigate uncertainty with clarity, resilience and conviction. Confidence, she emphasized, drives investment flows, and investment flows in turn generate commerce.

“It attracts capital, and capital attracts commerce,” she said.

As the summit concluded, participants converged on a single point: Africa’s next phase of growth depends on governments establishing stable policy environments while businesses simultaneously strengthen governance and transparency standards. The message to African investors was equally clear, that the continent’s future depends on capital flowing inward from its own citizens rather than looking perpetually abroad for funding. Whether governments move quickly enough to create the conditions that make that possible is the question that will define the next decade.