At the 2025 Africa Sovereign Investors Forum (ASIF) in Abuja, Mr. Bolaji Balogun, CEO of Chapel Hill Denham, delivered a compelling case for African sovereign wealth funds (SWFs) to prioritize local currency infrastructure financing, drawing on Nigeria’s own pioneering example through the Nigeria Infrastructure Debt Fund (NIDF).
Speaking during a high-level session themed Homegrown Solutions: Driving Infrastructure Investment through Local Currency Instruments, Balogun issued a powerful critique of Africa’s reliance on foreign currency to finance infrastructure. “No advanced country has built its infrastructure on foreign currency debt,” he asserted, challenging the conventional wisdom that has dominated African infrastructure financing for decades.
His argument struck at the heart of a persistent challenge facing African economies: currency devaluation events that make foreign currency-denominated infrastructure financing unsustainable and ultimately impoverishing to local populations.
Balogun highlighted the success of NIDF, which he described as the continent’s first and largest listed infrastructure debt fund. “We created a 22-year local currency loan product—something commercial banks and private equity simply cannot deliver,” he noted, referencing the short-term constraints of bank lending and private equity limited partners (LPs). Since inception, NIDF has delivered decent returns to investors, attracted investment from nearly all Nigerian pension funds, and has never experienced a single default event.
Balogun recounted the fund’s evolution, including early challenges when only one pension fund participated in the inaugural raise. Series two and three brought in Nigeria Sovereign Investment Authority (NSIA), and the African Development Bank joined in Series five. These proved to be catalytic moves. As of 2025, NIDF has successfully raised funds 11 times, created liquidity in an inherently illiquid asset class, and helped to transform the infrastructure investment landscape in Nigeria.
Beyond debt, Balogun announced Chapel Hill Denham’s latest innovation—the Nigeria Infrastructure Equity Fund. While the debt fund is denominated in Naira, the equity fund is structured in dollars to appeal to DFIs, MDBs, and global investors seeking long-term, impact-driven returns. He explained that equity can be dollar-based because it doesn’t carry the same repayment risks. He however bemoaned the absence of viable exit pathways, which remains a major barrier to infrastructure financing in Africa. “We need robust capital markets to enable recycling of capital.”
His call to action was clear: Africa’s sovereign investors must lead by example, replicating models like NIDF to mobilize local currency capital at scale. “This is a proven model that works. If we want to build resilient infrastructure and safeguard our economies from currency shocks, local capital must be the foundation.”
The NIDF model demonstrates several key principles that African SWFs are already adopting:
· Local currency debt instruments for sustainable, long-term infrastructure financing
· Sovereign wealth fund anchor investment to catalyze broader institutional participation
· Partnership with development finance institutions to enhance credibility and scale
· Creation of liquidity in traditionally illiquid infrastructure assets
· Progression from debt to equity as markets mature and investor confidence build