WEST AFRICA – The African Development Bank (AfDB) has approved a US$20 million equity investment in Uhuru Growth Fund 1 that focuses on on high growth middle-market businesses across West Africa.
Uhuru Growth Fund 1 is a first-generation fund sponsored by the private equity firm Uhuru Partners Limited.
The equity firm 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.
Through the Bank’s support, Uhuru Partners is anticipates 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 US$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 US$200 million.
Abdu Mukhtar, the African Development Bank’s Director of Industrial and Trade Development said the Bank’s investment will be instrumental to Uhuru’s US$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.
Uhuru Partners, as an equity firm tries to bridge the gap on scarce Equity capital across the continent and especially for smaller companies with revenues below $50 million.
Uhuru’s compelling investment in West Africa proposition is underpinned by several macroeconomic and institutional factors which include; the region’s large aggregate population and rapid urbanization
The investment will also leverage on youthful demographics, sustained economic growth and relative political stability.
Additionally, the presence of Uhuru’s key executive and operational teams in Ivory Coast and Nigeria is also perceived as a huge asset, enabling the team to effectively source investment opportunities in the Anglophone and Francophone economies of West Africa.
Additionally, the 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.
The investment affirms the Bank’s commitment to its Ten-Yaer Strategy (2013-2022) focusing on inclusive growth and creating broad-based prosperity as well as well as promoting 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.