West Africa: the AfDB points out a “piping” issue rather than a lack of money.

The ADB report highlights a weakness in financial intermediation, which limits the transformation of savings into long-term financing. This situation contributes to keeping the investment effort around 23 to 24% of gross domestic product, a level deemed insufficient given the region’s needs.

Tax pressure also remains low, particularly within the West African Economic and Monetary Union, where it stands at 14.9%. This limited capacity to mobilize public revenue reduces the leeway of States to finance infrastructure, social services, and the investments necessary for economic transformation.

For the ADB, the issue lies less in the theoretical availability of funds than in the mechanisms to capture, secure, and allocate them to priority sectors. West African economies have resources, but these still face difficulties in flowing towards projects likely to sustainably support growth.

Difficult Resources to Direct

The bank’s diagnosis resembles a problem of financial plumbing. Capital may be present in economies, banks, or markets, but the transmission channels to businesses and public projects remain too narrow or too fragile.

This weakness in intermediation particularly weighs on long-term investments. Infrastructure, energy, transportation, and social sectors require significant and predictable financing, whereas regional financial systems often favor shorter and less risky operations.

The mobilization of domestic revenue is another central lever of the report. With a tax pressure of 14.9% in WAEMU, States have limited resources to meet the increasing development needs in a context marked by population growth and urbanization.

The ADB thus calls for improving the functioning of financial circuits rather than focusing solely on seeking new donors. The goal is to strengthen the capacity of States and financial institutions to transform savings and external financing into concrete investments.

Need for Financial Reforms

The gap between financing needs and the current level of investments underscores the magnitude of the necessary adjustments. The region must simultaneously increase its public revenue, mobilizable savings, and the capacity of banks and markets to finance long-term projects.

The ADB’s 2026 regional report also places the quality of financial governance at the center of this equation. Better tax collection, a more efficient allocation of expenditures, and more suitable financing mechanisms could help reduce the estimated annual deficit of between 90 and 100 billion dollars.

The issue is therefore not solely about the volume of available funds. It also concerns the strength of institutions, the reliability of projects presented to investors, and the capacity of West African economies to create the necessary conditions for sustainable capital mobilization.

According to the ADB, achieving West Africa’s development goals will thus depend on modernizing its financial circuits. Without this improvement in intermediation, the increase in financing is unlikely to translate into an equivalent rise in investments and growth.