Keypoints:
- Ghana, Nigeria and Zambia launch SME fund-of-funds
- Local pensions and central banks drive new financing
- Domestic capital shifts SME funding landscape
A NEW wave of fund-of-funds initiatives in Ghana, Nigeria, and Zambia is signalling a major shift in how African countries finance small and medium-sized enterprises (SMEs). With global donor support declining, local institutions are stepping up to close the financing gap using homegrown capital solutions, ImpactAlpha reports.
National advisory boards for impact investing, backed by the Global Steering Group for Impact Investment (GSG Impact), are helping design blended finance structures that channel institutional and public funds into SME-focused intermediaries.
Ghana’s Ci-Gaba fund nears first close
In Ghana, the Ci-Gaba Fund-of-Funds, led by Savannah Impact Advisory, is preparing for its first close in September 2025. Targeting $75 million in blended finance, the fund has already secured commitments from two local pension funds and received catalytic capital from FSD Africa, the UK’s development finance institution.
‘Fundraising has been good,’ said Hamdiya Ismaila, managing director at Savannah, during the Africa Impact Summit in Accra. The fund is designed to support local capital providers that serve small businesses across West Africa.
Ci-Gaba has committed capital to two funds already, with plans to deploy up to $7.5 million across others. Backers include a European development institution, a family foundation, and the Growth Firms Alliance, which supports emerging-market growth companies.
Zambia puts $200m behind SME lending
Zambia’s central bank has anchored the Small Business Growth Initiative (SBGI) with a $200 million first-loss facility, aiming to make SME finance more accessible and affordable. The fund-of-funds will back both bank and non-bank lenders targeting underserved businesses, especially those led by women or focused on climate resilience.
‘We’re beginning to see disruption in the finance ecosystem,’ said Austin Mwape, former deputy governor of the Bank of Zambia, who now advises Impact Investing Zambia.
The SBGI had secured funding from the US Millennium Challenge Corp., but it was pulled after President Donald Trump returned to office and slashed development aid. Replacement capital is now being sought from pensions and development financiers.
Nigeria’s pension funds move into impact
In Nigeria, local pension funds have pledged to match a $50 million government allocation to the Nigeria Wholesale Impact Investment Fund, aimed at boosting sustainable economic growth, job creation, and poverty alleviation.
Modelled on the UK’s Better Society Capital, the fund will invest through local intermediaries into impact-driven enterprises. It is managed by Impact Investing Nigeria and supported by GSG Impact.
‘The structure of a wholesale fund-of-funds—taking inspiration from dormant asset models—can help unlock domestic capital,’ said Elizabeth Boggs Davidsen of GSG Impact.
A model for Africa-wide transformation
The three funds mark early success in adapting the wholesale fund-of-funds model to African contexts. They also reflect growing institutional interest in private equity and venture capital, which were previously seen as too risky by many African pension funds.
‘If you can hook domestic capital, it brings certainty for other investors,’ said Boggs Davidsen. ‘While catalytic capital is helpful, domestic sources are key to long-term sustainability.’
The shift comes with broader policy and structural reforms. ‘Policy is probably the most important tool in the toolkit today,’ she added.
As African fund managers and governments look to scale these models, leaders like Ismaila and Mwape believe success lies in pairing capital with capacity-building and co-investment strategies that bridge global and local expertise.
