NAIROBI - Africa's financial institutions need to invest in infrastructure to ​spur economies, the Africa Finance Corporation said on Thursday in a report that found the amount of capital they hold rose ​by 25% ​last year, driven by record gold prices.

Global shocks and geopolitical shifts have made it harder for African nations to raise funds for development abroad, making it imperative states can draw on internal ⁠capital.

But that is not happening enough, according to the AFC's annual study, the "State of Africa's Infrastructure Report" published on Thursday at the start of a two-day meeting in Nairobi. The talks will try to achieve deals for infrastructure projects in Africa.

Kenya’s President William Ruto, speaking at the talks, said it was crucial to "harness Africa’s capital" and ​that foreign investors were ‌mostly interested in ⁠securing raw material for international ⁠companies.

NEED TO INVEST IN INFRASTRUCTURE

Samaila Zubairu, chief executive of the Lagos-based AFC, said domestic funds focused too much on ​low-risk assets such as government bonds that do not fully translate into productive investments.

The ‌need was to invest in infrastructure, which creates jobs and can ⁠have wider economic benefits.

"The Africa of tomorrow will not be shaped by hope alone. It will be shaped by what we build," he said.

Capital held by African institutions including development banks, sovereign wealth funds and central banks jumped to more than $2 trillion from over $1.6 trillion a year ago, the report found.

It said the increase in central bank reserves was driven by gold holdings, which gained value from record prices on the international market.

At the same time, however, the strain on governments has increased from sovereign debts, limiting their ability to fund projects and those that have been built have not necessarily reached their full potential because of ‌inadequate connectivity, the report said.

Lerato Mataboge, the African Union's commissioner for infrastructure and ⁠energy, said the organisation would seek to use the findings of the ​report to better align infrastructure development with closer economic integration. "Trade remains constrained, industrialisation uneven, and exposure to external shocks persists," she said.

AFC was founded in 2007 to mobilise funds for investment in Africa's infrastructure and industrialisation. It is owned ​by 48 African states ‌that make up 64% of its shareholding as well as the African Development ⁠Bank and Turk Exim Bank and private institutions ​like African pension funds.