In finance, is perception more important than reality?
The second day of the 2025 General Assemblies of the African Trade Insurance Agency (ATIDI), held in Luanda, was marked on Friday, June 20th, by a high-intensity intellectual roundtable on the perception of African risk and capital mobilization. In front of an audience composed of financiers, institutional investors, rating agencies, and representatives of multilateral organizations, experts confronted African realities with persistent representations of a high-risk continent.
88 billion USD covered by ATIDI
In his introduction, Manuel Moses, CEO of ATIDI, highlighted the agency’s growing role in supporting investments in Africa:
“ATIDI currently covers over 88 billion dollars in commitments on the continent, with risk coverage instruments aimed at facilitating investment flows in environments perceived as volatile.”
He specifically mentioned Angola, the host country, as an example of a rapidly changing economy engaged in structural projects ranging from the privatization of national champions to the modernization of its financial markets.
Focus on Angola: 90% of exports come from hydrocarbons
Jusian Do Susa, Secretary of State at the Angolan Ministry of Finance, emphasized:
“Angola no longer wants to be perceived solely as an oil country. We have launched the Propriv program, which has enabled the privatization of over 90 public companies out of 190 targeted between 2019 and 2023. This program, extended until 2026, notably includes the listing of Unitel, Sonangol, Endiama, TAAG, and even Bodiva itself on the stock exchange.”
The BODIVA (Angola Debt and Securities Exchange), a stock exchange platform launched in 2014, held its first IPO in December 2023 with the introduction of Banco Angolano de Investimentos (BAI). However, the most active segment remains that of public debt, with growing volumes in Treasury bonds.
Meanwhile, the Angolan government mobilized 6 billion kwanzas for refinancing its public debt, in a context of structural reform and economic diversification.
Focus on Senegal: 8.8% growth expected in 2025
As a guest country at the General Assemblies, Senegal presented its new development vision for 2050. According to Amadou Ibrahima Gueye, diplomatic advisor to the Minister of Finance:
“Senegal will start gas production in 2025, after oil production began in 2024. We project a GDP growth of 8.8%, driven by mining, agricultural, and industrial clusters, and a massive investment plan in infrastructure.”
Among the key points from the presentation by Amadou Ibrahima Gueye:
– 12 tons of gold produced in 2024
– A mining hub under construction with 330 billion CFA francs in investments
– A 100% publicly-owned mining holding company being structured
– A gas pipeline network in deployment
– A reform of the investment code, and a 2034 digital plan aimed at digital sovereignty.
Authorities announced raising 620 million euros on the UEMOA market, and have just launched a new issuance of 300 billion CFA francs, currently open for subscription. In addition, an agreement is expected to be finalized soon with the IMF, as stated by Pape Moda, special advisor to the Minister of Finance, intervening virtually from Dakar. “Negotiations with the IMF are very advanced and cover various aspects, including the issue of energy subsidies,” said the confident advisor regarding the conclusion of an agreement in the coming weeks. Dakar aims to reduce the budget deficit to below 3% by 2027.
Perception vs. reality: the true nature of African risk
The core of the debate at this investor roundtable revolved around the “perception cost” of African risk, estimated by several participants at 74.5 billion dollars per year. This invisible premium is due to market distrust towards African economic fundamentals.
Thus, Gabrielle Reid from Pangea-Risk, a risk country intelligence consulting firm, pointed out that “East Africa is projected to grow by 5.7% in 2025, compared to 4.4% for West Africa, although the latter remains in a tense security context in the countries of the Sahel Alliance. Across the continent, average inflation is expected to decrease from 19% to 14% between 2024 and 2025. However, insurance premiums are increasing, and financing costs remain high.”
Asked about the role of rating agencies, Samira Mensah (S&P Global) illustrated the weight of perception with a striking example: “In 2021, Kenya raised 2 billion USD at a rate of 6.5%. Three years later, in 2024, for only 1.5 billion USD, the country had to offer a 9.5% return.” According to Ms. Mensah, this differential is explained by a combination of factors: risk perception, exchange rate volatility, political uncertainties, debt sustainability, and budget discipline.
For his part, Hamouda Chekir (Centerview Partners) noted that “only two African countries currently have an investment-grade rating. In West Africa, the highest-rated are Benin and Côte d’Ivoire with a double B.”
Furthermore, the outlook does not escape the current context. International trade tensions, such as the increase in US tariff barriers, will further increase the cost of capital for emerging economies.
Takunda Pongweni (Rand Merchant Bank) emphasized the need to reduce the cost of this perception of African risk, estimated at between 70 and 80 billion USD, reflecting high rates.
Innovation and collective action: how to reduce this cost?
The following session, led by journalist Anne Marie Borges, addressed structurally reducing the cost of capital through financial innovation.
John-Martin Ndaws from the Africa Finance Corporation (AFC) discussed his institution’s role in sovereign risk coverage and supporting states in sovereign markets. Most recently, “the AFC backed the issuance of an Egyptian Samurai bond, with partial guarantee.” The AFC’s goal is to raise funds in mature markets and redistribute them at affordable rates in Africa.
Leonard Kange (Bank of Industry Nigeria) first explained the Bank Of Industry’s positioning, exclusively dedicated to financing the private sector with a range of dedicated products. While Claudia Lopes (Crown Agents Bank) made a clear call:
“Development financial institutions (DFIs) must return to the continent to structure, syndicate, and secure long-term financing.”
Through this roundtable, ATIDI confirmed its ambition: to transform the perception of African risk into an investment opportunity. The consensus is clear: Africa is not underperforming; it has an overestimated risk perception.
As summarized by Dr. Patrick Ndzana Olomo (AU Commission):
“Reducing the cost of capital is first about reducing the perceived risk cost. This involves transparency, credible local ratings, and deepening financial markets.” The debate on African risk raises the question of whether there is a need to create an African rating agency or reform and deepen the African financial architecture to mobilize more capital locally.
