The African Development Bank has approved a US$20 million equity investment in Uhuru Growth Fund 1, a first-generation fund sponsored by Uhuru Partners Limited, a private equity firm, focused on high growth middle-market businesses across West Africa.
The Bank’s equity support will enable Uhuru Partners to make investment forays into consumer-facing and financial services sectors in West African countries including Nigeria, Ghana, Cote d’Ivoire, Senegal, Burkina Faso and Mali.
Investments of $5 million and above will be made in companies in these sectors, helping them grow into regional champions, and creating new, high-quality jobs.
The proposed investment will give the Bank approximately 10% of the Fund’s target capitalization of $200 million.
Equity capital is scarce in Africa but particularly so for smaller companies with revenues below $50 million. Private equity funds such as Uhuru will help address this void.
Abdu Mukhtar, the African Development Bank’s Director of Industrial and Trade Development said the Bank’s investment will be instrumental to Uhuru’s $200 million fundraising exercise. “The Bank’s support of Uhuru Growth Fund will unlock capital from other development finance and commercial investors into a fund that will help strengthen West Africa’s economies, create jobs and drive development,” Mukhtar said.
The Fund’s investment strategy is aligned with the Bank’s Ten-Year Strategy (2013-2022), focusing on inclusive growth and creating broad-based prosperity, as well as the Bank’s Country Strategy Papers for target countries which seek inclusive growth, access to local SME finance and regional integration as the pathway to sustainable development of the African continent
The Fund’s strategy is also aligned with the Bank’s High 5 priorities to Industrialize Africa, Feed Africa, Integrate Africa and Improve the quality of life for the people of Africa.
Original source: AfDB
Published on 27 March 2019
