AVCA rallies for investment uptick to unlock $2.3trn of domestic capital in Africa

Business a.m.

The African Private Capital Association (AVCA) has issued a call to action, urging for heightened investment efforts to tap into the $2.3 trillion pool of untapped domestic capital in Africa.

The association highlighted the imperative during the AVCA 20th Annual Conference & VC Summit held in Johannesburg, under the theme ’embracing change and shaping the next era of Africa’s prosperity’. The event, a convergence of institutional investors, fund managers, policymakers, global and local investors, and entrepreneurs, marked a significant international gathering, drawing over 700 private capital leaders from more than 60 countries. 

Abi Mustapha-Maduakor, chief executive officer of AVCA, spearheaded the organisation’s flagship forum by highlighting the remarkable resilience of Africa’s private capital industry, which, despite grappling with a volatile macroeconomic landscape in recent years, has remained steadfast in its trajectory.

Building on the momentum of the AVCA 2023 conference, Phuthuma Nhleko, the chairman and co-founder of Phembani Group, delivered a  keynote address that called upon private investors to seize the opportunity to invest in innovative businesses that could propel prosperity across the continent.

Reaffirming Africa’s untapped potential, Nhleko underscored the need for policymakers, business leaders, and investors to strategically leverage the burgeoning fourth industrial revolution, with artificial intelligence (AI) and the digital economy serving as powerful catalysts for sustainable growth and development.

Nhleko urged stakeholders to envision and implement a new transformational plan to harness Africa’s vast untapped potential, calling attention to the rising African population. He noted that by 2050, Africa is projected to be home to 2.5 billion people, representing over a quarter of the world’s population, with over forty percent of these people under the age of 18. With Nigeria’s population on track to exceed that of the United States by 2050, he underscored the continent’s immense potential for growth and development.

Characterised by periods of globalisation, innovation and the disruption required, the opening panel, ‘20/20 Vision: Reflections on the Last 20 years’, charted the industry’s evolution over the last two decades. Tokunboh Ishmael, co-founder and managing director, Alitheia Capital, described the exponential growth witnessed throughout the second decade of private capital expansion in Africa. 

While charting the remarkable ascent of the African private capital industry over the past 20 years, which had seen a marked growth in fund managers and assets under management (AUM), the industry’s most eminent voices, including Wale Adeosun, founder and chief executive officer of Kuramo Capital Management, and Vincent Le Guennou, chief executive officer of Africa50’s Infrastructure Acceleration Fund, concurred that the industry remained nascent and possessed tremendous potential for further growth.

Expounding on the opportunities that institutional investors from the U.S could bring to the African private capital landscape, Adeosun dwelled on the potential benefits.Guennou echoed Adeosun’s sentiment while also sounding a clarion call for the industry to adapt its traditional private equity model to better suit the African context.