Following a continent-wide recession and the shift of external partners towards focusing on their domestic needs after COVID-19, Africa’s policymakers need to look inward. The continent needs a recovery plan that is financed largely by Africans. Also, considering the heightened risks of climate change and extreme weather, as well as the need for post-pandemic economic recovery, development priorities have shifted towards sustainable development. This means that infrastructure development must be transformed to focus more on low-carbon and green infrastructure – consistent with the international climate protocols, such as the Paris Agreement and nationally determined contributions (NDCs). It should focus on rural development, regional connectivity, and risk mitigation for climate change.

Achieving the Sustainable Development Goals (SDGs) requires concerted efforts to develop economic and social infrastructure. Tutwa recently conducted a study focused on the economic (or physical) infrastructure sectors while acknowledging the heavy dependency of the social infrastructure sectors on improvements in the energy, transport, water, and digital sectors. The study presented Asset Recycling as an alternative to infrastructure financing mechanisms in African countries.

What is Asset Recycling?

Infrastructure asset recycling is the monetisation of existing public assets through sale or lease to the private sector, with all funds received being reinvested in new infrastructure projects. Asset recycling provides the opportunity to develop new infrastructure without adding to public debt, all while maintaining or potentially improving existing infrastructure service delivery.

Figure 1: Infrastructure asset recycling process

Asset recycling allows governments to bring private sector innovation, investment, and efficiency to an asset without handing over the ownership of the asset to the private sector. It is a partnership between the public and private sectors to manage, maintain and operate an asset for a specific period. The government retains control over the construction, design, and outputs while leveraging private sector methodologies and innovation to upgrade and operate those assets efficiently over a set time. Asset recycling allows governments to release the value of their existing assets by bringing forward future revenues. A virtuous circle is created when the proceeds are invested back into new, more efficient, and more sustainable infrastructure.

While asset recycling is a new concept in Africa, countries like Australia have used it to generate over AUD25 billion ($18 billion) in three years by recycling just 12 state-owned assets. African governments could emulate this approach to help close the infrastructure-financing gap, which the African Development Bank (AfDB) estimates at USD68-108 billion annually. Aside from the immediate benefits, asset recycling in Africa could attract a new class of infrastructure investors, as has been the case in Australia. Here, sovereign wealth, pension, and private investment funds have participated in asset recycling projects.

African governments can limit their dependence on donors and development finance institutions by working to attract these types of institutional investors. The continent has 30 sovereign wealth funds (SWFs) or sub-funds, mostly relatively small, with a combined wealth of around USD100 billion.[1] In December 2022, Africa50, the pan-African infrastructure investment platform, signed a Memorandum of Understanding with the government of Zimbabwe to establish a framework of cooperation to manage and operate three of the country’s international airports under the Africa50 Asset Recycling Programme.[2] This marks the beginning of innovation in infrastructure financing in the continent.

Private investors are often reluctant to take on project development risk for infrastructure in emerging markets and developing economies. However, they are interested in the returns the investments can provide once the projects are operational and demand is proven. Asset recycling is a potential mechanism to capitalise on this interest. Its strategies present a viable means for African governments to contribute significantly to self-financing the investments that their countries so urgently need.


[1] Global SWF, 2022. African SWFs: The Art of Patience, 23 August 2022.

[2] Africa 50, December 2022,