Nigeria and Ghana seems to be a great place to start the small business as African Private Equity & Venture Capital Association (AVCA), a non-profit organization, has committed $10 million each for the Small and Medium Enterprises (SMEs) industries in the two countries.
The CEO of the Alitheia Capital, Tokunboh Ishmael and one of AVCA’s board members said that the company currently has approximately 1000 investments across Africa; adding that equity is a crucial thing for SME sector financing.
“Private equity and venture capital plays a crucial role in financing the SME sector, which is the engine of economic growth the world over,” Tokunboh noted.
Ahead of the 11th annual conference of AVCA, CEO of African Capital Alliance Okey Enelamah explained: “with reported investment figures increasing to $3 billion in 2013, private capital in Africa is chiefly growth investment, unlike the typical perception of private equity in more developed markets.”
“SME is key to real sector growth. In advanced economies, SMEs account for over 50 per cent of the volume of businesses transacted. If Nigeria must grow the double digits in financial inclusion, she definitely has to look at SME growth and provide all it takes for SME businesses to flourish in the country,” added Tunde Lemo, former Deputy Governor of Nigeria’s Central Bank.
In 2012, Nigeria, Africa second largest economy, reported that it has about 8 million SMEs employing about 42.4 million people and contributing about 46.5 per cent of nominal GDP.