IFC Invests in West African Fund to Boost Growth of SMEs and Women-Led Businesses in the Region

Lagos, Nigeria, July 2022 — IFC today announced an investment in Uhuru Growth Fund I, a fund managed by Uhuru Investment Partners (Uhuru), a middle-market private equity firm in West Africa. The fund will provide growth capital to the region’s small and medium-sized enterprises (SMEs), including women-led businesses. Access to equity funding is scarce in the region, representing just 6 percent of the total funding raised across Africa from 2017 to 2021.

IFC’s support includes an equity investment of up to $10 million from IFC’s capital and an additional $10 million from the Blended Finance Facility of the International Development Association’s Private Sector Window, which helps de-risk investments in low-income countries.

The fund invests exclusively in low-income countries, focusing on high-growth companies offering consumer and financial services in Nigeria, Ghana, and Côte d’Ivoire. The fund will also invest in businesses in Senegal, Mali and Burkina Faso. At least 25 percent of the companies the fund invests in will be owned or led by women. IFC will work with the fund to develop and implement environmental and social standards and improve gender diversity at the fund and the companies it invests in.

In addition to providing equity capital, Uhuru will help companies improve operations, secure banking relationships, and expand domestically, as well as across the region’s Anglophone and Francophone economies.

“IFC’s support has been crucial for a first-time fund like ours to reach our fundraising target in a challenging environment,” said Yemi Osindero, Managing Partner of Uhuru. “Entrepreneurs in our markets need partners that understand their challenges and can provide not just the capital, but the support to enable their businesses thrive, be impactful and ultimately succeed. We look forward to partnering with passionate local entrepreneurs to grow their business and to creating sustainable value for our investors and all other stakeholders.”

Private equity activity in Africa remains one of the lowest in the world, representing 2.6 percent of the total volume of private equity financing dedicated to emerging markets. Other than Nigeria, most countries in West Africa have nascent or non-existent private equity markets. Fundraising for private equity in West Africa dropped to $134 million in 2021 from $234 million in 2018. IFC’s investment in Uhuru investment could demonstrate that investing in underdeveloped private markets like West Africa, often perceived as higher risk, can generate returns to investors with sufficient deal flow and exit potential. West Africa has a large, young population, rapid urbanization, and relative political and currency stability.

“SMEs are essential to economic growth, job creation, and poverty reduction,” said Kevin Njiraini, IFC’s Director for Southern Africa and Nigeria. “Private equity financing can help smaller businesses grow into bigger regional players. By investing in Uhuru, we will enable more small businesses in Nigeria, and West Africa more broadly, to access much-needed growth capital to recover from the COVID-19 pandemic, offer innovative products, and support the region’s economic development.”

IFC’s private equity funds strategy focuses on providing growth capital to funds with the highest likelihood of financial and developmental success. IFC has committed more than $2 billion to more than 100 funds in Africa.

About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.

About the IDA Private Sector Window
As part of the 19th replenishment of the International Development Association (IDA), the World Bank Group is continuing the IDA Private Sector Window (PSW) created under IDA18 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA’s objectives and the World Bank Group’s twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution and the World Bank Group’s other tools and approaches are insufficient. For more information, visit: http://ida.worldbank.org/psw.