Why Africa’s Urban Resilience Depends on Access to Capital

The proceeds were channelled into projects designed to strengthen long-term urban resilience: electric bus procurement, water systems, energy efficiency upgrades, coastal infrastructure, and sanitation treatment. At a moment of acute crisis, the Mother City attempted to do what few African cities have the fiscal tools to achieve – translate policy ambition into structured capital deployment.

Yet, this remains one of the few exceptions.

Urban resilience – whether in infrastructure, services, or local economies – hinges on financial systems designed around the conditions in which African cities operate. The real test is whether those systems can enable resilience where it is most urgently needed.

According to the World Bank, more than half the world’s population now lives in cities – a figure expected to rise sharply in the coming decades, with nearly 70% of people projected to be urbanised by 2050. For low- and middle-income countries, the scale of investment required to meet this transition is estimated at up to US$2.7 trillion annually.

However, local governments, which are responsible for critical infrastructure and service delivery mandates in these cities, rarely control the revenue streams or borrowing rights required to meet them.

In many countries, subnational authorities do not have the legal standing to issue debt, access capital markets, or independently negotiate financing with development institutions. This is compounded by the reluctance of financiers to engage in contexts marked by liquidity shortfalls, political volatility, weak administrative and internal controls, or limited debt recovery capacity.

Without reliable own-source revenue or creditworthy balance sheets, cities struggle to meet even basic expenditure obligations, let alone leverage finance for long-term infrastructure investment.

While international financing agendas increasingly reference sustainability, infrastructure, and inclusion, cities remain underrepresented in the systems that govern capital flows. The Urban 20 (U20) process was created to elevate the voice of cities within the G20 framework, recognising that resilience and sustainability goals cannot be met without enabling urban centres to act. As South Africa assumes the G20 presidency, there is a rare opportunity to shift the conversation – from cities as beneficiaries of funding to cities as credible actors within capital markets.

That shift begins with recognising investability as a governance and systems issue, not just a project pipeline concern. To strengthen their creditworthiness and attract long-term capital, local governments must focus on a combination of institutional, financial, and operational reforms.

Cities must be able to demonstrate fiscal reliability through disciplined financial management, credible reporting, and transparent budgeting frameworks that anchor investor confidence. At the same time, the ability to originate and structure bankable projects – with defined revenue streams and sound risk allocation – is essential to attracting long-term capital. These efforts are most effective when embedded within stable governance systems and supported by partnerships across development finance, technical institutions, and the private sector.

Where local capacity is limited, investment in institutional skills – particularly in infrastructure planning, financial structuring, and delivery management – becomes critical. A growing number of cities are also exploring alternative financing models, including pooled mechanisms, green bonds, and public-private platforms that align with investor mandates. Underpinning all of this is the imperative to signal a clear commitment to sustainability – not as a policy ideal, but as an investable principle shaping how urban infrastructure is financed and delivered.

Financial institutions have a structural role to play here.

Their ability to originate, aggregate, and syndicate deals is central to translating fragmented municipal demand into viable financial products. Beyond balance sheet lending, institutions can support the development of risk-sharing structures, assist in standardising documentation, and help establish pricing benchmarks that make municipal infrastructure a recognisable asset class. Financial innovation is also critical – from green bonds and impact-linked instruments that align capital with resilience goals, to blended finance structures that de-risk investment through strategic combinations of public and private funding. Public-private partnerships, pooled platforms, and municipal bond programmes offer institutional models through which cities can unlock scale, while emerging channels such as regulated crowdfunding may help catalyse more localised participation.

Many of these instruments and models depend on financial institutions to structure and bring them to market. In doing so, they contribute to building a more investable system – expanding the conditions under which cities can access and absorb capital at scale.

Urban resilience will not be achieved through ambition alone. It will depend on whether the financial system can adapt – structurally, systemically, and at scale – to the conditions under which African cities are being built.

That imperative is reflected in the U20’s 2025 priorities: economic opportunity and financing, climate resilience, social equity, and digital transformation. Each hinges on whether capital can be mobilised where it is most needed, and in forms cities can access. As the global agenda continues to foreground sustainability and inclusion, Africa’s cities must be treated not as afterthoughts in the policy discourse of the G20, but as investment frontiers in their own right – enabled by systems designed to support them.