Funding for space activities in Africa is on the up, but continues to come mainly from public sources, both local (national budgets) and international, in a blended funding logic.

According to Space in Africa, African countries’ national budgets allocated USD 534.9 million in 2022 to national space programmes, showing a surge in growth since 2019. Along with the increased funding involved, there has been an expansion of the objectives pursued by this funding, which now encompass concepts such as the democratisation of space, the development of propulsion and launch technologies, the development of human capabilities, and the development of local and international space partnerships.

International sources of funding translate into investment from intergovernmental and supranational organisations (e.g. the United Nations, the European Union, or the International Monetary Fund), development banks (e.g. the World Bank, the African Development Bank, or the European Investment Bank), and other States/governments.

There are also private sources, such as investment funds, companies and banks, which include several instruments, ranging from donations to securing loans on the market (namely bank loans) and guarantees, as well as direct investment (e.g. setting up a business in the country or acquiring domestic companies) and investment in financial assets (e.g. bonds and equity). Africa Finance Corporation, for example, provided a USD 2 billion facility fund to NewSpace companies and organisations to support space projects for sustainable development.

Other initiatives, although not specifically targeted at the space sector, may also be a relevant source of funding given the instrumental role that space technologies, services and data have in all sectors.

For instance, the African Development Bank and the African Union Commission have signed a USD 9.73 million agreement to promote the development of the digital market in Africa.

There is also funding from the European Union, which has committed EUR 82.5 million to strengthen cooperation with Africa in digital and space technology, launched a EUR 150 billion investment package to support Africa in various areas where space technology plays an important role, such as digital transition and reducing risks from natural disasters, and signed an agreement with the European Investment Bank (EIB) worth a total of EUR 4 billion to promote private sector investment in African, Caribbean, and Pacific countries. Also by way of example, the US is planning to invest over USD 350 million and facilitate over USD 450 million in financing for Africa under its Digital Transformation with Africa (DTA) initiative.

Although more tentatively, it is also expected that, as has happened in other ecosystems, the momentum of activities benefitting from space technologies (particularly in the context of the digital economy) will have a spill-over effect and will attract private funding for space activities in Africa. Africa currently has a relevant private investment ecosystem when it comes to financing start-ups in the technology sector (Nigeria, for example, attracted around USD 2 billion between 2015 and 2022) and has several initiatives to promote digital start-ups (such as the GITEX Africa/One Africa Digital Summit to be held in June 2023).

However, the relevance of private investment will only gain traction if the private parties interested in investing are provided with the necessary tools. In the words of a venture capital investment fund (which runs, among others, a technology investment accelerator programme in Africa), it is still essential to build a regulatory system that supports the development of private investment activities in the space sector and the development of private financing solutions for the space sector.

Indeed, as pointed out in the past, access to financial markets by recent small companies with innovative products or business models is particularly difficult.

Lastly, in order to build an industrial base to support the needs of this sector and foster space technology, public sector space projects must rely on the private sector's participation, and it is thus key that governments and their agencies subcontract space activities to private industry. At the same time, leveraging regional and international financing and cooperation opportunities could help maximise the development and potential of products and services to be supplied by the private sector to government customers, thus contributing to both national and continental African technological and commercial capabilities.