AfDB approves US$15m Equity Investment to boost SME growth in West Africa

The Board of Directors of the African Development Bank has approved a US$15million equity investment in Verod Capital Growth Fund III, a private equity fund that will make investments in high-growth middle market companies of Anglophone West Africa including Nigeria, Ghana, Liberia, Sierra Leone and the Gambia.

The Fund’s investments will be into companies within consumer-driven sectors: including light industrials, fast-moving consumer goods, education, financial services and agro-processing. The ticket size for each investment will be between US$5million and US$20million.

“The Fund will help accelerate investments in small and medium-scale enterprises (SMEs) in the West African region. This is key to job and wealth-creation, knowledge transfer and scaling-up of local businesses,” said Abdu Mukhtar, the African Development Bank’s Director of Industrial and Trade Development. He also added: “The Fund will provide an important vehicle for growing SMEs in Africa, which are a key pillar of the continent’s industrialisation drive”.

The Fund Manager, Verod Capital Partners, is an experienced indigenous private equity firm with extensive knowledge of the Anglophone West Africa market. It also possesses a strong record of accomplishment in SME investments. Since 2008, Verod Capital Partners has invested in 16 SME companies of the region. The Fund’s target size is US$150million.

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Verod Capital Growth Fund III will have a direct and measurable impact on individual businesses in West Africa while improving their ability to expand, thereby providing benefits in terms of government revenue and job creation to the countries’ domestic economies. This is in line with the Bank’s Private Sector Strategy of supporting projects which have a strong impact on job creation, economic growth and poverty alleviation.

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