Speaking under the event’s central focus on economic development, regional leaders argued that Africa cannot successfully scale up its manufacturing value chains or transition away from exporting raw commodities without building a robust, domestic infrastructure for risk absorption.

Delivering the keynote paper, Kanayo Awani, Executive Vice President of Intra-African Trade and Export Development at Afreximbank, highlighted the stark reality facing the continent’s industrial ambitions. Across most of Africa, insurance penetration remains frozen at just 2% to 3%, compared to a global average of 6.8%. Furthermore, Africa’s entire continental reinsurance market accounts for a mere 1.6% of the global total.

Awani stressed that these deficits are directly choking industrial expansion, resulting in delayed infrastructure projects, higher financing costs, and a problematic status quo where too much African risk is ceded to foreign markets.

“Research shows the strong link between higher insurance penetration and higher manufacturing value-added per capita,” Awani said. “Put simply, if a country has industrialized, it means it has learned to manage its own risk.”

To support the industrial goals of the African Continental Free Trade Area (AfCFTA), which spans 1.5 billion people and a combined GDP of $3.4 trillion, Awani called on policymakers to view insurance as a fundamental pillar of trade and project finance rather than a peripheral service.

She noted that the continent faces an annual infrastructure funding deficit of nearly $90 billion. To bridge this gap, she urged global and regional insurers to mobilize their balance sheets, noting that directing just 0.5% of the world’s $42 trillion in insurance assets toward African infrastructure would transform the continent’s industrial capacity.

The conference also highlighted how national-level regulatory reforms can successfully unlock capital for broader economic growth. Mahmoud Farid, Egypt’s Minister of Investment and Trade, speaking on behalf of the Prime Minister, detailed Egypt’s recent four-year regulatory overhaul.  

Farid pointed to a previously controversial mandate by Egypt’s Financial Regulatory Authority (FRA) that forced insurance companies and private pension funds to invest a strict minimum percentage into listed equities. While initially met with industry pushback, Farid revealed the strategy has successfully energized local capital markets. Thanks to the influx of institutional insurance capital, Egypt is now preparing for four to five new private sector Initial Public Offerings (IPOs) alongside major state Listings like Misr Life Insurance.  

By tightening governance, driving digitization, and mandating equity investments, Egypt’s reforms demonstrated how a structured insurance sector can directly feed the wider financial ecosystem required for industrial investment.

Reinforcing the social necessity of these economic strategies, Egypt’s Deputy Minister of Foreign Affairs for African Affairs, H.E. Mohammed Abu Bakr, concluded that a strong insurance and reinsurance network ensures that individual citizens and businesses do not have to shoulder the volatile risks of economic transformation alone.

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She disclosed this while delivering the keynote paper at the 52nd annual conference of the African Insurance Association (AIO),ongoing in Cairo, Egypt, that Africa currently attracts roughly $80 billion in actual annual infrastructure spending against estimated needs of almost $170 billion. “This leaves a financing deficit of nearly $90 billion, which costs the continent up to 2% of foregone GDP growth per year. To reverse this trend, Awani argued that project funding must be protected by robust risk-transfer mechanisms to unlock institutional investment.

“The gap will not be closed by capital alone,” Awani said. “It will be closed by capital that can be insured, capital that can be syndicated and held with confidence.”

Across most of Africa, insurance penetration remains stubbornly low at just 2% to 3%, compared to a global average of 6.8%. In 2024, only South Africa (11.5%) and Namibia (7%) exceeded the global benchmark. Furthermore, Africa’s entire continental reinsurance market wrote just over $6 billion in premiums—barely 1.6% of the global total.

Awani stressed that these low metrics directly harm continental development, causing projects to be delayed, financing to be priced higher, and too much African risk to be ceded abroad. She noted that while the African Continental Free Trade Area (AfCFTA) has established a massive economic framework of 1.5 billion people with a combined $3.4 trillion GDP, its ultimate goals of industrialization and expanded value chains cannot be realized without local risk absorption.

Globally, insurers hold approximately $42 trillion in assets. Awani proposed that channeling even half a percentage point of that capital toward African infrastructure would begin to fundamentally close the continental financing gap.

The strategy is already gaining traction among development finance institutions (DFIs). DFI participation in African private infrastructure projects shifted significantly from 2022 to 2023, with insurers and export credit agencies increasingly becoming the syndication partners of choice to secure bankability through political risk, credit, construction, and operational interruption insurance.

The conference also spotlighted successful domestic overhauls, with Egyptian Minister of Investment and Trade Mahmoud Farid highlighting Egypt’s recent insurance sector reforms. Farid detailed how a previously controversial Financial Regulatory Authority (FRA) mandate forcing insurance companies and private pension funds to invest a minimum percentage into listed equities has ultimately stabilized the local market and catalyzed four to five upcoming private sector IPOs.

Supporting the drive for wider safety nets, Egypt’s Deputy Minister of Foreign Affairs for African Affairs, H.E. Mohammed Abu Bakr, stated that the reinsurance and insurance sectors are vital to ensuring no individual has to carry the burdens of economic risk alone.

Concluding her address, Awani urged African policymakers to stop viewing insurance as a peripheral service and instead integrate it into the core infrastructure of trade and project finance, noting a direct statistical link between high insurance penetration and manufacturing value-added per capita.

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