Home Features Africa Turns to Digital Bonds for Infrastructure
Gulf investment is rising, but Africa needs long-term solutions to close a huge infrastructure financing gap.
Africa harbors grand aspirations. In the continent’s long-term development blueprint, Agenda 2063, “world-class” infrastructure is one of the goals under Aspiration 2.
Realizing the goal of linking the continent by rail, road, sea, and air, as well as energy and ICT, to specifically unleash regional and international trade is proving herculean. The reason is financing constraints. Annually, Africa wrestles with an infrastructure financing gap of more than $80 billion, according to the Africa Development Bank.
For decades, China was the blue-eyed boy, helping Africa address infrastructure bottlenecks. In recent years, however, Gulf states have emerged as strategic partners.
Dubai-based DP World is among Gulf companies investing billions in Africa’s infrastructure. The conglomerate’s latest foray is in Kenya, where it is investing $100 million in a mega special economic zone (SEZ). The complex is expected to integrate Kenyan companies into regional and global supply chains .
While Gulf partners are at the forefront of helping Africa meet infrastructure needs, the huge funding gap is forcing the continent to innovate in mobilizing long-term financing at scale. In this context, digital bonds are the latest capital-raising solution.
Africa Finance Corporation (AFC) became the first African institution to issue the asset class, raising 350 million Swiss francs ($427.4 million) through a five-year digital bond, structured as a tokenized security on a Distributed Ledger Technology (DLT) platform and priced at a 1.4925% coupon .
As the largest ever issuance in the Swiss Franc market, it attracted unprecedented interest from high-quality investors, including banks, asset managers, and hedge funds.
“Digital bonds have the ability to resolve frictions that characterize traditional bond issuances, making them ideal for investors with a different kind of risk appetite,” said Eric Musau , Head, Research & Sustainable Finance at Kenya’s Standard Investment Bank.
Fragmentation, exorbitant costs, slow and manual processes, and a complex web of intermediaries are among the friction points digital bonds can resolve.
As debt securities issued and recorded on DLT or blockchain, digital bonds are gaining traction. In 2025, global DLT fixed-income issuance totaled €4.8 billion ($5.5 billion), a 48% increase from €3.2 billion in 2024, according to the Association for Financial Markets in Europe .
Asia remains the epicenter of issuances, with €3.8 billion issued in 2025, representing 78% of the world’s total.
AFC has identified inadequate infrastructure as the primary threat to Africa’s long-term growth. The institution, which has disbursed $19 billion to finance numerous projects across 36 countries, believes the new capital pool will help accelerate financing for critical sectors, including transport, power, natural resources, heavy industry, and telecommunications.
Transport, SEZs, and industrial parks are often cited as being central to the success of the African Continental Free Trade Area (AfCFTA). In transport, for instance, traffic flows are expected to increase significantly across all modes.
Maritime is a case in point. According to the Economic Commission for Africa, freight is projected to double from 58 million tonnes to 131.5 million tonnes by 2030 under the AfCFT…