“The center of gravity is moving away from external capital towards domestic capital mobilization,” said Boggs Davidsen. “With overseas development assistance declining and geopolitics so fragmented, countries are no longer asking, 'How do we attract more external capital?’ They’re asking, ‘How do we mobilize our own?’”

Across Africa, institutional capital exists in pension funds, sovereign wealth funds, and insurance pools. The challenge is aligning policy, regulation, and market structures so more of that money flows to local investment, she added.

Countries with more stable economies and strong governance are better poised to improve the flows of domestic capital, be it public or private, and build their local markets. Others may struggle even as the focus turns inward.

This shift also elevates the role of local and regional development banks.

Read the full article at Devex: Development finance trends to watch in 2026 | Devex