News
By Liz Wilson, CEO, Small Foundation
On 8th October, at the launch of Domestic Capital Africa (DCA) coalition, Impact Investing Ghana ran a quick poll. Of those who participated, 65% said their organisation was already actively mobilising domestic capital into local investment. Others were running pilots or exploring. Only around one in ten said they weren’t doing anything yet.
It was one of many signs that the coalition’s launch is timely. More than 200 people joined, from Ghana, Nigeria, Cameroon, Liberia, Kenya, Zambia, Namibia, South Africa and beyond: pension trustees, fund managers, regulators, DFIs and market builders. So much is already in motion, much of it led by people and networks who have been doing this work, and sharing what they learn, for many years. What excites Small Foundation about DCA is its potential to bring these and more efforts into view, shining a light, so other can find, learn and build on them.
There is real momentum. Africa’s pension funds alone hold an estimated $600 billion, according to FSD Africa, and that pool keeps growing. Most of it still sits in government paper. Amma Gyampo of the Ghana Venture Capital Association put it plainly: we can’t solve our structural problems while the bulk of our retirement savings is parked in sovereign debt.
Asset owners are now saying the same thing. Matthew Mani of Axis Pension Trust described how Ghana’s domestic debt restructuring changed the conversation among trustees almost overnight. Suddenly everyone was asking what the alternatives were. Rodgers Byamugisha of NSSF Uganda, a fund with $8.5 billion under management, told us opportunities at home are thinning and they are looking further afield. As Matt Guttentag of Growth Firms Alliance noted, these opportunities are also about where decisions get made.
Nevertheless, readiness doesn’t always mean a clear path. Trustees continue to ask for structures and deals they can back with confidence, and vehicles that are willing to lead the way are critical.
That learning is already travelling. Africa Impact Investing Group (AIIG) members have hosted cross-country exchanges on how Ci-Gaba was built, including a roundtable with Zambia’s National Advisory Board. Impact Investing Ghana has also distilled what it learnt into a framework, developed with thought partnership from the Growth Firms Alliance , FMO and Snowmelt. Ci-Gaba needed three things in place: enabling policy, a pool of pension capital large enough to matter, and an investment vehicle with SMEs ready to receive it. These were all connected by local leadership, catalytic funding and continuous capacity building.
Hamdiya’s advice to anyone trying to replicate this was to start with a validated market need, not a predetermined fund vehicle. Ci-Gaba is a starting point, not a template. Uganda, Zambia, Nigeria and Burkina Faso are each somewhere on this path, and each will look different. Seeing those experiences side by side, including what hasn’t worked, can help everyone move a little faster.
We’re also encouraged by how DCA is set up. Its secretariat is hosted by Impact Investing Ghana, working with the AIIG, and activity at country level is led locally. DCA describes itself as a platform and an amplifier. It sits alongside the many networks already doing this work, several of which are part of the coalition, and helps bring their efforts into wider view. Its work covers bringing the right people together, documenting what works, building skills among trustees and managers, and helping connect catalytic funding to where it is needed.
Small Foundation’s reason to support this initiative, including as a member of Growth Firms Alliance, is straightforward. We see thriving SMEs at the heart of economic transformation across the continent. In the long run, those businesses need capital that goes beyond external and concessional sources, deployed by local experts in local institutions.
We want to participate as a co-learner and amplifier, as much as a funder. We invested in Ci-Gaba and learnt directly from Savannah Advisory, Impact Investing Ghana, and other funders and investors along the way. We have also provided funded guarantees to local financial institutions to reduce collateral requirements for agri-SME lending. We found that guarantees alone don’t remove the regulatory and institutional barriers those lenders face. We are keen to share lessons like that, and to learn from others who have found ways through.
If you are a pension trustee, fund manager, regulator or funder working on this, we encourage you to join the coalition and share your story, including the parts that didn’t go to plan. Collaboration moves at the speed of trust, and seeing what others are already doing is often where that trust begins.
