FSD AFrica Wants To Help Grow Business

UK aid-funded financial inclusion organization FSD Africa has announced the launch of the Africa Private Equity and Private Debt Programme – a new initiative to support the development of private capital markets in Africa as a complement to public capital markets, as well as a partnership with four other African funding bodies, including the Private Equity and Venture Capital Association Nigeria (PEVCA).

Financial Sector Deepening Africa aims to reduce poverty across sub-Saharan Africa by building financial markets that are efficient, robust and inclusive.

According to Mark Napier, CEO at FSD Africa, the private equity and private debt programme will work to improve the long-term financing options available for businesses across key sectors in Africa’s economy, including healthcare, climate and agriculture. FSD and co are going to leverage various tools including grants, technical assistance, advocacy and investment capital to support the growth of private capital markets.

"Supporting the development of private equity and private debt markets in Africa will provide a boost to small and medium-sized businesses and local economies," Napier said.

"We believe this will be greatly welcomed in the short term, ensuring that more jobs are saved, but it will also provide long-term benefits and improve access to capital.

Globally, there has been a secular shift towards private capital markets and it is appropriate that, as part of our response to COVID-19, we pay enough attention to the development of private markets, allowing for more local capital to be channelled into essential sectors including health, agriculture and climate.”

"SAVCA is looking forward to partner with FSD Africa on this initiative to support the development of
private capital markets in Africa," Tanya van Lill, CEO, SAVCA, said in a press statement Thursday. "This Programme has the potential to unlock much needed catalytic capital for businesses and industries that have the potential to not only create and preserve jobs but also contribute to much needed economic growth given the impact of COVID-19."

According to the statement, the new co-operation agreement with African Private Equity and Venture Capital Association (AVCA) and East Africa Private Equity and Venture Capital Association (EAVCA) and Southern Africa Venture Capital and Private Equity Association (SAVCA) and the Private Equity and Venture Capital Association Nigeria (PEVCA) was made to ensure local expertise and tailored delivery for regional and country mandates.

FSD Africa, AVCA, EAVCA, SAVCA and PEVCA will work with policymakers, regulators, industry associations, institutional investors and other market operators to encourage and advocate for changes that promote increased flow of institutional capital into private capital markets. Through the programme, FSD Africa and its partners will seek to create a knowledge-sharing environment by working with regulators to put in place regulatory provisions and/or incentives, build capacity and understanding of relevant market stakeholders.

Speaking about the move, Ify Ossi, Executive Secretary, PEVCA, said with the unprecedented economic shocks brought on by the pandemic, the case for mobilizing private capital on the continent become more evident.

"In the face of the huge funding gap and growth lag facing sectors across Nigeria, long-term access to local financing coupled with structural adaptations were necessary, are key to our economic growth and sustainability," Ossi said.

"Interventions that address industry gaps and challenges must be both private sector and policy-driven guided by suitable strategic partnerships and alliances, among other factors.

"We are excited about PEVCA’s partnership with FSD Africa, particularly its pan African approach towards capital market development, and look forward to jointly facilitating solutions for our industry."