By Joshua Worlasi AMLANU
The Venture Capital Trust Fund (VCTF) is ramping up efforts to secure more domestic capital as it seeks to expand its impact on small- and medium-sized enterprises (SMEs), citing a proven investment model and strong portfolio performance.
At a media engagement marking its 20th anniversary, VCTF executives highlighted the fund’s achievements – investments in 77 companies, 14 profitable exits and over 28,000 jobs create – as evidence that venture capital can work in Ghana’s economic landscape if properly structured and funded.
“We have validated that the model works,” said CEO of VCTF, Michael Abbey.
“All our exits have been profitable and we’ve shown that strategic investments can yield high returns while creating jobs and stimulating innovation,” he added.
Since inception, the fund has invested GH¢359.6million into various venture funds, catalysing more than GH¢2billion in additional funding from private investors. For every cedi committed by VCTF, GH¢5.58 was raised from external sources, according to the trust.
Portfolio companies have paid nearly GH¢47million in taxes, further underscoring the fund’s economic contribution.
The fund’s investments have spanned sectors such as agri-processing, healthcare, education and manufacturing. Notable exits include Caltech, an ethanol company that delivered over twice the invested amount; and Legacy Health, which yielded a strong multiple upon exit.
Food processing company Elsa Foods and education-focused institutions like AUCC and Penfield are among other success stories.
Despite these achievements, Mr. Abbey cautioned that the sustainability of Ghana’s venture capital ecosystem remains vulnerable due to over-reliance on foreign capital.
He pointed out that the majority of funding still comes from external sources, leaving local businesses exposed to the whims of international donors.
“What this means is that, at any point, foreign capital can exit – just as we’re seeing with USAID. That’s why domestic funding is critical,” Mr. Abbey said.
VCTF is exploring several initiatives to shore-up local capital. These include tapping pension funds, promoting corporate social responsibility contributions to SME-focused venture funds and launching a ‘Responsibility to Grow’ campaign that encourages big businesses to support smaller firms.
Percival Amponsah, VCTF’s General Manager, explained the fund’s role as a catalytic investor. He said VCTF often anchors new funds by taking the first-loss position, which helps de-risk investments and attract private capital.
This strategy, he noted, has been instrumental in encouraging institutional investors to back first-time fund managers.
“We act like an anchor tenant in real estate,” Mr. Amponsah said. “Once we come in, it signals credibility and helps others come on board.”
The trust is planning several new initiatives. These include an ‘Ejumera Fund’ to complement government’s programme to develop 10,000 start-ups annually; a 24-Hour Economy SME Equity Fund; and a Technology Innovation Fund in partnership with the Ministry of Communications under the Ghana Digital Acceleration Project.
Mr. Abbey described the trust’s future as “exciting”, adding that more programmes will be rolled out in the coming months to deepen the fund’s impact.
