Redesigning The Future: Sustainable Financing For The Majority World In An Age Of Shifting Power

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KEYNOTE SPEECH BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, IMMEDIATE PAST VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA, THEMED: REDESIGNING THE FUTURE: SUSTAINABLE FINANCING FOR THE MAJORITY WORLD IN AN AGE OF SHIFTING POWER, AT THE 6TH PAN-AFRICAN PHILANTHROPY CONFERENCE IN CAIRO, EGYPT FROM JULY 27-31, 2025

PROTOCOLS

First, let me thank Dr Ebrima Sall, CEO of Trust Africa and his team for the very kind invitation to participate in this 6th Africa Philanthropy Conference and to make these remarks on the theme of the conference: “Sustainable Financing for Development in the Majority World.”

The question before us is both simple and profound: can we redesign the financial future in a way that serves not a privileged few, but the vast majority of humanity? For the majority world, Africa, Asia, Latin America, and the Caribbean. This is not a question of convenience; it is a matter of survival, sovereignty, and justice.

Let me frame the context again, as I am sure this has been done frequently in the past few days. Across Africa and much of the majority world, we face a perfect storm of challenges: A population that is youthful and fast-growing,  demanding jobs, opportunity and dignity. There is a climate crisis that we are the least responsible for, but which is displacing our communities, destroying crops, shrinking GDPs, and driving people from their homes. Africa is the fastest-warming continent and the least prepared for the devastation of extreme climate events. Debt burdens are nearing 70% of GDP, with debt service now eclipsing national spending on health and education.

And we have public revenue systems that are often outdated, narrow, and overwhelmed by informality, opacity, and extractive global practices. And just as these pressures intensify, so too has the retreat of traditional development partners. The United States has withdrawn from or defunded key multilateral institutions, UNESCO, WHO, and now the dismantling of USAID. The UK has slashed development aid to Africa by 40%. Many EU countries are cutting back in various proportions. This is more than a shift in balance sheets. It is a signal. A signal that we must now finance our futures not on the basis of goodwill or benevolence, but through rethinking value, strategy, and power. Not through dependence, but through redesign.

Allow me to share a few pillars on which the redesign of the financial future of the majority world may rest.

The first pillar is perhaps the most overlooked: the revaluation of what we already possess. Reclaiming natural capital as an asset. Across Africa and the majority world, our most valuable assets, our forests, peatlands, rivers, biodiversity, and mineral reserves, do not appear on national balance sheets. GDP, as traditionally calculated, ignores them. And so we become paradoxes, rich in resources but poor in creditworthiness. This is where Natural Capital Accounting becomes essential.

Natural  Capital Accounting is not just about environmental protection; it is a radical act of financial justice. It says: our forests are not just forests, they are carbon sinks. Our mangroves are not just habitats, they are storm buffers. Our peatlands are not just terrain; they are climate stabilisers. They add real value, measurable in financial terms, to the preservation and propagation of global wealth. Yet they are not accounted for, let alone paid for. When properly accounted for, these become bankable assets. They enable access to new financing instruments, green bonds, conservation bonds, and debt-for-nature swaps, whose markets are growing exponentially. But without data, valuation, and verification, we are locked out.

Some countries are moving ahead; Botswana has developed detailed water and mineral accounts that now guide sustainable pricing and extraction. South Africa uses national biodiversity accounts in its development planning and has attracted private investment for conservation finance.  Liberia and Uganda are piloting wetland and forest valuations with support from WAVES and UN partners. This is not a luxury; it is a necessity. Because without natural capital accounting, our natural wealth remains invisible. But with it, we unlock sustainable financing, not by extracting nature, but by valuing and preserving it.

The second pillar is how to pay for reversing energy poverty. Africa has the world’s biggest untapped renewable energy potential, both in absolute and relative terms. Africa’s renewables potential is 50x the global anticipated electricity demand in 2040. Despite this abundance, over 600 million people lack access to electricity. Nearly a billion lack access to clean cooking, and where it is available, electricity prices in many African countries are too high and are often at par or above various upper-middle income countries.

There is a massive problem of energy poverty, which means development and personal well-being are jeopardised. The reaction of many majority world governments and their development partners to this problem is to strongly focus on creating energy access as a priority. And because grid coverage and interconnectivity are low, and the biggest energy access challenges are in peri-urban and rural areas, off-grid and mini-grid solutions tend to take priority.

Sadly, these often are not financially sustainable and so they need consistent donor or public financing, which in itself is a threat to continued access and tends to limit available capacity sufficient to meet very basic needs and is certainly insufficient for catalytic entrepreneurial activities (such as on-site agro-processing, cooling, etc).  The opportunity to set in motion a truly virtuous cycle in which energy access drives economic growth and livelihood improvement is lost.

At first glance, the fact of a lack of energy access to large rural populations in a situation of abundant renewable energy potential may be confusing. Yet it is important to realise that, globally, universal energy access tends to be achieved through cross-subsidies. These work out differently in different settings, but one approach is to use the profits from serving urban and industrial customers to fund grid expansion (or cover the marginal costs of off-grid solutions) to have enough to serve more remote customers.

Energy-poor consumers in many African countries represent a real need for energy but not a bankable demand: they are both insufficiently aggregated and often will not be able to afford the fully loaded costs of their energy. So given the high capex for investments in energy generation and economies of scale in many projects, investors in these projects need to see secure offtake.

The most predictable and most financially viable approach to this is to secure anchor industrial demand from newly established energy-hungry industrial activity. In other words, find industries that use a lot of energy, and use the excess capacity for rural customers who would not have been able to pay the fully loaded cost of power. And there are opportunities. As the world needs to green everything it consumes and remove carbon at a very large scale, energy-hungry industries are looking for large-scale renewable energy access, ideally close to relevant primary materials, markets, and other relevant production factors (such as labour and land). In fact, it is exactly those energy-intensive processes that will make investment in renewable energy bankable, which in turn can drive increased energy access (either through larger-scale generation on the backbone of industrial demand, or through cross-subsidising dedicated off-grid and mini-grid solutions).

Also, location decisions when developing green industrialization pathways need to take into account that we are moving from a world where energy, in the form of hydrocarbons, was easy and cheap to transport, to one where renewable energy is not, which calls for locating energy-hungry industrial processes close to sources of renewable power to produce low-embedded emission products for global consumption — by linking renewable energy supply directly to large-scale, energy-hungry industries that can serve as anchors.

Let me be specific; three categories of industries offer particular promise:

1.⁠ ⁠Industries where production can be located anywhere, and energy cost is the deciding factor: Green data centres, for instance, do not need to be located in New York or Frankfurt. They can be located wherever renewable power is abundant and cheap. Microsoft’s planned 1GW geothermal-powered data centre in Kenya is a case in point. Or even the prospects of Direct Air Capture technology — removing CO₂ from the atmosphere. These systems work best in regions with cheap, clean power. Africa can lead here, not follow.

2.⁠ ⁠Industries where location is strategic: Africa’s maritime and aviation geography makes it ideal for producing green fuels, ammonia, hydrogen, and methanol for global shipping and aviation routes. Likewise, producing green fertiliser domestically aligns with Africa’s food security goals while reducing import bills and boosting employment.

3.⁠ ⁠Industries where we already have the minerals: Africa holds over 40% of global cobalt reserves, 30% of bauxite, and vast deposits of lithium, iron ore, and copper. Yet we export raw materials and import the value-added products at a premium. Why? Because we lack the energy infrastructure and financing models to process locally. But if we power smelters, refineries, and manufacturing facilities with renewable energy, then we cut emissions, keep value on the continent, and position ourselves as exporters of green solutions, not just raw inputs. This is how we move from climate victimhood to climate leadership. But anchor demand is not a silver bullet. We must also fix enabling conditions, regulations, skills development, logistics, and, of course, the cost of capital. We need de-risking tools, guarantees, blended finance, and long-term purchase agreements to catalyse investment at scale.

We must also fight for fair market access. The EU’s Carbon Border Adjustment

Mechanism (CBAM), if poorly implemented, risks penalising African exports, even if they are greener than European ones. The problem with CBAM is that it does not penalise the use of carbon-intensive energy sources for production, which is 70% of the carbon content. So, for example, if you use coal fire to process bauxite into aluminium, you are not penalised. So, this disincentivises green production options and Africa’s comparative advantage.

The third pillar is global, and it speaks to equity and voice. It is the necessity of reforming the Global Financial Architecture. The financial system we operate in today was not built for nor with the participation of the majority world. That system now governs everything from development lending to climate finance. But it does so without adequately representing the 6 billion people living outside the G7.

Let’s take a look:

1.⁠ ⁠Africa, with over 1.5 billion people, holds just 7% of the voting power in the IMF.

2.⁠ ⁠Cost-of-capital in Africa is high. African governments pay 5 times as much interest in the bond market as they would if the Multilateral Development Banks were adequately capitalised. Those seeking investments for private projects face high costs of capital and unhelpfully short tenors, driven by both real and perceived risk factors. The allocation of Special Drawing Rights in 2021 sent 5% to Africa and over 40% to the wealthiest countries.

3.⁠ ⁠Climate finance promises remain unmet, and when funds do flow, they often come as loans, not grants, and in ways that bypass national systems. Many of these issues have been identified in the Bridgetown Initiative and the Capital Adequacy Framework, among others. And suggestions for reform have been well made. They include a wide range of tools that increase and strengthen the balance sheets of Multilateral Development Banks, ensure more of their deployment goes to emerging and frontier economies, and drive more deployment towards climate-aligned investments.

Technical solutions such as recycling of SDRs, smart capital blending and tailored risk mitigation interventions will support this.

Things must change. We need fair representation and a voice in global financial institutions, reflective of today’s population and development needs. Reforms to credit rating agencies to eliminate bias and reward real governance progress. A new global climate finance mechanism that includes re-channelling SDRs, scaling loss and damage finance, and expanding concessional funding. Also, global tax justice through a UN-led tax convention that ends illicit profit shifting and strengthens national treasuries.

The current architecture privileges the powerful, fragments the rest, and constrains the future. We need a system that invests in global public goods, pools resources predictably, and centers development where it matters most.

The fourth pillar follows from the third; it is resolving Africa’s disastrous debt burden. Africa is experiencing its worst debt crisis in 80 years. Today, more than 20 low-income African countries are either bankrupt or at high risk of debt distress. The continent’s debt-to-GDP ratio is 64%, and much of its revenue is consumed by repayments. With limited fiscal space, Africa cannot invest meaningfully in development. Making matters worse, Africa remains overly dependent on commodity exports, yet its debt is outpacing export earnings. According to the UN, Africa is the only region where debt is growing faster than GDP.

Despite growth efforts, African countries are still forced to borrow at higher interest rates than anywhere else in the world, due to inflated risk perceptions perpetuated by rating agencies. As a result, Africa pays the highest borrowing costs globally. Over the past 15 years, Africa’s interest payments have more than doubled, the steepest increase in the world. And as we know, the net capital flows from public and private creditors (excluding multilateral creditors) to developing countries were negative in 2022-2023. So, we paid more to the creditors than we received in new inflows from debt issuance or new loans.

And going to the private capital markets is also not an option for the majority of Emerging Markets and Developing Economies (EMDE), as borrowing is out of reach for them with bond yields surpassing expected growth rates (e.g. Nigeria and Ethiopia with bond yields over 15%, Kenya with bond yields over 10%).

Many other African countries are burdened with debt so heavy that, on average, governments now spend more servicing debt than on health or education. The consequences are devastating. In 2019 alone, more than 150 million Africans were pushed into extreme poverty due to health expenses. Africa loses over $2.4 trillion annually in productivity due to illness — yet health budgets are being cut to service debt.

In Nigeria, for instance, over 70% of national health spending comes directly from individuals’ pockets. Meanwhile, around half of government revenue goes to debt service. This is the reality across many African countries, trapped in a cycle that perpetuates poverty and stifles development. With Africa’s population expected to rise from 1.5 billion to 2.5 billion by 2050, the urgency cannot be overstated. The current debt relief solutions are hardly fit for purpose. The Common Debt Framework’s case-by-case model has not worked efficiently; negotiations have proven to be too lengthy and cumbersome, with few incentives for private creditors to participate and ultimately delivering little actual relief. But happily, there are many ideas and initiatives around workable solutions.

In February 2025, former African Heads of State and leaders launched the African Leaders Debt Relief Initiative (ALDRI) in Cape Town, calling for urgent and coordinated action. ALDRI proposes a two-pronged approach:

1.⁠ ⁠Comprehensive debt restructuring for highly indebted countries based on a predictable, fair, and inclusive process involving all creditors, with comparability of treatment, where participation is based on the external debt sustainability analysis (DSA) by the IMF and World Bank.

2.⁠ ⁠Reducing the cost of capital through credit enhancements from multilateral institutions and debt suspension mechanisms to create fiscal space for climate and development investment.

As part of a more standardised process, we believe that we should also think of some sort of debt moratorium or debt standstill that applies once a country enters into a debt restructuring process. This would provide an incentive to speed up the process, also from the private sector side. We also think that it might be important to include MDBs in debt relief discussions. This is controversial because of the crucial issue of safeguarding their AAA rating. But the empirical reality is that large parts of the external debt of IDA-eligible countries is owed to multilateral creditors. Left out of any debt restructuring, this would mean that large parts of the debt remain unaddressed, reducing the level of resources that could be freed up through debt relief.

As the last International Debt Report by the World Bank has shown, multilateral lenders are increasingly lender of last resort, bailing out private creditors with their low-interest loans. This is not what these funds are for, so it may be necessary to make sure that private creditors participate in debt restructuring and take haircuts too.

The fifth pillar is Domestic Resource Mobilisation (DRM), the ability to raise, manage, and retain our own revenues, equitably and transparently. Let me highlight Nigeria’s recent progress. In July 2025, Nigeria passed landmark tax reform legislation, consolidating over a dozen fragmented laws into a single, modern Tax Act. Expanding the tax base to include digital assets, FX gains, and platform transactions and introducing a minimum effective tax rate for multinationals to ensure they contribute fairly.

Streamlining compliance through e-invoicing and VAT digitisation. Creating a Development Levy to simplify sectoral taxation and improve predictability. This is bold, necessary, and commendable. But Nigeria is not alone, Rwanda now finances over 58% of its national budget from domestic resources through tourism levies, excise duties, and targeted VAT. Across the continent, the African Tax Administration Forum (ATAF) is doubling exchange-of-information requests and enforcing mutual transparency standards.

Regional simulations by AfDB and OECD are helping countries identify untapped sources of revenue and fairer policy tools. Modern tax policy is not about extracting more — it’s about extracting fairly. It’s about taxing wealth, not just wages. Digitally, transparently, and justly.

And finally, we come to perhaps the most galling issue of all, illicit financial flows (IFFs). Curbing Illicit Financial Flows. Africa loses between $50–$88 billion every year to illicit flows, more than it receives in official development assistance. Funds hidden in offshore accounts, profits shifted to low-tax jurisdictions, trade mis-invoicing, shell companies and anonymous trusts. The loss is not just fiscal, it is moral.

We must enforce public beneficial ownership registries, join global information-sharing frameworks like the OECD’s exchange of tax data, regulate transfer pricing and implement real-time commodity benchmarking, recover stolen assets and mandate their use for development. Push for a UN-led financial governance framework, not one dominated by a handful of powerful economies. Until we fix retention, every reform risks becoming a revolving door, money comes in, and just as quickly, it flows out.

The sixth pillar is still on the subject of Domestic Resource Mobilisation – the role of African Philanthropy. As Overseas Development Assistance (ODA) and foreign philanthropic support to Africa decline, African philanthropies are increasingly well-positioned to fill critical financing gaps, though challenges remain. Their influence has grown with the rise of high-net-worth individuals, corporate foundations, and community-based giving. Examples include the Tony Elumelu Foundation, Dangote Foundation, Mo Ibrahim Foundation, Graça Machel Trust, and the AIG Imuokuede Foundation. These institutions have made notable contributions to entrepreneurship, health, education, and governance.

However, despite their rising visibility, most African philanthropies operate on a relatively limited scale, especially when measured against the continent’s vast development needs. Many remain elite-driven and focused on charitable or CSR-related initiatives, with fewer investing in long-term systems change or tackling root causes of inequality. Still, African philanthropies possess unique advantages: they are locally embedded, culturally informed, and less constrained by bureaucracy.

These attributes enable them to play catalytic roles in sustainable financing, particularly by providing risk-tolerant capital to attract larger investments into sectors like renewable energy and health, funding pilot projects that demonstrate the viability of local solutions, which governments and investors can later scale.

They convene stakeholders — governments, investors, civil society — for joint problem-solving and ecosystem-building. They build institutional capacity in public finance, accountability systems, and citizen engagement.

To truly step into this expanded role, African philanthropies must also overcome internal limitations, including weak transparency, limited collaboration, and insufficient focus on systemic impact.

With shrinking aid and donor fatigue, African philanthropies must evolve from gap-fillers to system-builders. Though their financial firepower may be smaller than global donors or multilaterals, their local legitimacy, strategic flexibility, and convening power can unlock new pathways to sustainable finance and drive Africa-led development at scale.

Let me conclude by saying that the majority world is not poor. It is under-financed, under-represented, and underestimated. But this century belongs to us, if we choose to claim it. Let us redesign how we value our assets, how we structure our industries, how we participate globally, how we mobilise resources domestically, and how we close the backdoors of financial theft.

Sustainable finance is not a question of charity, it is a question of justice; a question of strategy and a question of courage. Let us fight smartly for a new global financial architecture. Let us finance our own future not by default, but by design.

Thank you.