The fund will provide growth capital and expertise for companies in consumer-driven sectors, while seeking to maximise impact, promote gender diversity and ensure sustainable growth.
A fund managed by Abidjan-based private equity firm Joliba Capital to support SME growth in francophone west and central Africa has achieved commitments of €55m at its first close, supported by a group of international development finance and commercial institutions
The Joliba Fund I received funding commitments from the International Finance Corporation (IFC), France’s Proparco, Dutch entrepreneurial development bank FMO and French private equity firm LBO France, which is the majority owner of Joliba Capital.
The IFC said it was investing up to €15m, comprising an equity investment of up to €7.5m from its SME Ventures program and a further €7.5m from the Blended Finance Facility of the International Development Association’s Private Sector Window, created to de-risk investments in developing countries. FMO said it was providing €15m in financing via its MASSIF fund (€10m) and its Building Prospects Funds (€5m).
The fund is to focus mainly on creating a diversified portfolio of SMEs in francophone countries including Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Cote d’Ivoire, Mali, Niger, Republic of Congo, Togo, Senegal, and Gabon.
It will provide growth capital and expertise for companies in consumer-driven sectors, such as agribusiness, manufacturing, fast-moving consumer goods, education, healthcare, financial services, and logistics. Joliba Capital said value creation would be central to the strategy, which aims to generate “superior returns”, while deploying ESG strategies to maximize impact, promote gender diversity and ensure sustainable growth within portfolio companies.
The IFC noted private equity activity in west and central Africa remains among the world’s lowest, citing Global Private Capital Association data showing that private equity fundraising for regional funds in West Africa declined to $20m in 2022 from $234m in 2018. The region’s French-speaking countries have also tended to be less well served by private equity markets than its English-speaking states.
Proparco, the private sector financing arm of Agence Française de Développement (AFD), has been a hands-on supporter of the initiative since its inception. Deputy CEO Djalal Khimdjee said Proparco praised Joliba Capital’s commitment to generating sustainable returns and implementing ESG best practices for maximum impact, especially by promoting gender diversity. “We are also very pleased to see LBO France, a top tier French GP support an initiative towards the Africa continent, as we hope it will be the first one of many,” he said.
Hamada Touré and Yann Pambou, co-founders of Joliba Capital, said they looked forward to welcoming more commitments from DFIs and institutional investors en route to a final close for the fund, which is targeting a €150m total.
William Sonneborn, IFC’s global director for disruptive technologies, creative Industries, and funds said initiatives such as the Joliba fund and the IFC’s SME Ventures programme helped African smaller firms, which were often family owned, to improve margins, build brands, and create jobs.
“In many cases, especially in countries with nascent private equity ecosystems, IFC is helping create markets as our support help attract other investors with similar interest to create new sources of equity financing for SMEs,” he said.
IFC support had been crucial in crucial in signalling the viability of investments in francophone Africa and bringing in DFIs and commercial investors. “We look forward to continuing to work with IFC’s SME Ventures program and helping more SMEs access capital, create value and expand in the region,” Touré and Pambou said.