13th June 2019, Dar es Salam, Tanzania: The Africa Enterprise Challenge Fund (AECF) today hosted an investment forum bringing together financiers from across the world to identify investment opportunities in agribusiness and renewable energy in Small and Medium Enterprises (SMEs) operating in Africa. The forum is a matchmaking platform bringing together 15 investors, over 50 SMEs seeking a total of US $50 million in investment.
Africa is the next investment frontier. African economies, therefore, offer tremendous opportunities, in agribusiness and renewable energy with SMEs rapidly growing in number, presenting an excellent investment opportunity. Despite this, SMEs are still facing challenges in mobilising capital. According to the International Finance Corporation (IFC) it is estimated that Africa’s finance gap for small and medium enterprises stands at $331 billion.
“Tanzania is honoured to host the first AECF investment forum in 2019 that seeks to bridge the finance gap. The investment forum provides investors a pipeline of de-risked investments and an opportunity for SMEs to raise commercial capital for their businesses. As a country, we acknowledge the challenges that investors and SMEs face while seeking investment opportunities. The forum is timely and we welcome partners like AECF to Tanzanian to host similar forums,” said, Mr. Oswald Ruboha, Ag. Director of Policy and Planning from the Ministry of Agriculture, Tanzania.
The landscape is also changing and more opportunities are lining up for SMEs, with the United Nations Conference on Trade and Development, estimating that in 2018, inward foreign direct investment (FDI) to Africa was expected to increase from US$ 42 billion (2017) to US$ 50 billion, making Africa the world’s second-most attractive investment destination.
This positive change does not stop here. According to Doing Business 2019 by World Bank, sub-Saharan Africa leads with the highest number of business regulatory reforms with the region accounting for 1/3 of the business reforms. On average, it now takes 21 days to start a new business in the region, compared with 61 days and in 2003, when the publication was first published.
“AECF is part of the transformative change happening in Africa. Through our AECF Connect we have supported 12 businesses to raise US $45 million from commercial investors. This has contributed significantly to the growth and sustainability of these businesses,” said, Mrs. Pauline Mbayah, Director Strategy and Partnership, AECF.
For this development to be sustainable, governments need to continually create an enabling environment for private sector and especially the SMES, according to World Trade Organisation they account for 90% of all jobs in the developing world.
“AECF is happy to be part of the transformation in Africa, and especially in Tanzania. We acknowledge the role government of Tanzania plays in creating an enabling environment for businesses especially SMEs in Tanzania. We call on the government of Tanzania to continue dialoguing with private sector and investors, as key partners in the country’s development agenda,” said, Mrs. Pauline Mbayah, Director Strategy and Partnership, AECF.
The AECF investment forum is a two-day workshop that aims at advancing SMEs to bankable stages, raising capital and accelerating the financial closure of deals. The investors will have access to a selected and pre-screened pipeline of small and medium businesses in agribusiness and renewable energy that have been funded by The AECF.