The New African Financial Architecture (NAFA)

Dr. Fred Muhumuza, a Ugandan economist and director at Makerere University Business School, to examine Africa’s push for the New African Financial Architecture and its implications for growth. Dr. Fred Muhumuza is a Ugandan development economist and senior lecturer at Makerere University Business School (MUBS), where he also directs the MUBS Economic Forum, a platform focused on policy analysis and debates around African economic development. His background in development economics, experience as an Economic Advisor to Uganda’s Ministry of Finance, and work with institutions such as the Economic Policy Research Centre and Financial Sector Deepening Uganda give him a strong grounding in African financial‑system design. The New African Financial Architecture (NAFA)

is a continental‑level framework promoted by bodies such as the African Development Bank to coordinate Africa’s fragmented national and regional financial systems and deepen domestic capital markets. It aims to shift the continent away from over‑reliance on external debt and donor‑driven finance toward a more self‑reliant, rules‑based system that mobilises savings and institutional capital (pension funds, insurance, etc.) for African development priorities. The following paragraph shows that this is not far-fetched. The highest debt-to-GDP ratios in Africa are found primarily in some smaller and crisis-stricken economies. Countries with the highest debt-to-GDP ratios According to recent estimates (mostly for 2023), Sudan tops the list of African countries and even the world, with a national debt of approximately 252 percent of GDP. Other African countries with very high debt-to-GDP ratios (above or very close to 100 percent) include: Malawi Seychelles Zimbabwe Egypt Zambia Ghana Uganda Cameroon Tanzania Ivory Coast Tunisia Morocco These countries regularly appear in international rankings among the African countries with the highest national debt. Debt burden in absolute figures In absolute dollar amounts (external sovereign debt), the largest debtors in Africa are: South Africa Nigeria Angola Ghana Zambia These five countries together account for a large share of sub-Saharan Africa's total external debt (estimates suggest around half). Given Muhumuza’s long focus on public‑finance governance, debt management, and domestic resource mobilisation, he would likely emphasise that NAFA must strengthen Africa’s financial sovereignty while safeguarding macroeconomic stability. From his vantage point, the architecture’s growth implications turn on how well it can: - deepen domestic capital markets so that African‑sourced savings finance infrastructure, industry, and SMEs rather than relying mainly on external borrowing; - improve transparency, regulation, and risk‑management in African financial institutions to lower the cost of capital and attract long‑term investment; and - align with national and regional development strategies (such as the African Continental Free Trade Area and national industrialisation plans) so finance flows to productive sectors rather than speculative or rent‑seeking activities. If properly implemented, NAFA‑style reforms could support higher, more inclusive growth by lengthening the maturity of public and private borrowing, stabilising exchange‑rate and inflation pressures driven by external shocks, and creating deeper regional financial markets where African institutions cross‑lend in local currencies. However, Muhumuza would likely caution that success depends on political will, capacity building in central banks and finance ministries, and strong accountability mechanisms to prevent misuse of domestic‑market firepower for budget deficits that do not translate into real‑sector productivity. In short, the New African Financial Architecture (NAFA) is a strategic framework proposed by Dr. Sidi Ould Tah, President of the African Development Bank Group, to enhance Africa's financial sovereignty and mobilize domestic resources for development. Launched in November 2025, it was prominently presented during the 39th African Union Summit in Addis Ababa in February 2026. NAFA aims to shift Africa from reliance on external capital toward coordinated, large-scale financial systems that unlock local savings and institutional funds. It addresses challenges in risk structuring and capital deployment to support Agenda 2063 ambitions like industrialization and infrastructure. Regional blocs, including IGAD, have endorsed it for deepening financial integration and closing development financing gaps.