The African Development Bank (AfDB) has approved a $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.
Uhuru Partners Limited is composed of an experienced indigenous team with strong local networks, extensive knowledge of the West Africa market and a track-record of SME investments in the region.
The Bank’s equity support would enable Uhuru Partners 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 would be made in companies in these sectors, helping them grow into regional champions, and creating new, high quality jobs.
The proposed investment would give the Bank approximately 10 per cent of the Fund’s target capitalisation 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 .
Uhuru’s compelling investment proposition is underpinned by several macroeconomic and institutional factors. These key factors include West Africa’s large aggregate population, rapid urbanisation and youthful demographics, sustained economic growth and relative political stability.
The presence of Uhuru’s key executive and operational teams in Abidjan and Lagos was also perceived as a huge asset, enabling the team to effectively source investment opportunities in the Anglophone and Francophone economies of West Africa. The PE firm’s presence in the region’s largest and leading commercial hubs also enables them to get actively involved in the operations of their portfolio companies across the region.