And here’s why Nigeria, Kenya, and the rest of the continent should take note.
Early this month, Ghana quietly did something revolutionary: it mandated that 5% of pension fund assets be allocated to private equity and venture capital. Ghana mandates 5% pension allocation to private equity/VC – Africa Global Funds
At first glance, this might sound like a small policy change. But for those of us who’ve spent years in the trenches of African tech—backing founders, chasing down capital, navigating short-term global cycles while betting on long-term African growth—this is nothing short of historic.
Because what Ghana just did was create policy with teeth.
Not a fund.
Not a press release.
Not a hopeful MOU.
But a mandate—one that forces open a door that’s been shut for too long.
Africa’s Capital Mismatch: What Ghana Just Solved
Africa is brimming with innovation. From Ghana to Kenya, Nigeria to Egypt, we have the founders, the talent, and the ideas. But one thing we’ve consistently lacked is local capital at scale.
The majority of early-stage venture money in Africa still comes from outside the continent. While that’s helped build a baseline, it’s also left African startups vulnerable to shifts in global sentiment—pullbacks, currency volatility, and fundraising cycles far removed from our local realities.
Partech Africa Report 2023 – 89% of funding came from non-African investors
At the same time, there’s over $300 billion in pension fund assets sitting in African markets.
That capital is long-term by nature. It wants to grow. It needs diversification. It is, in many ways, a perfect match for venture.
But until now, it’s remained on the sidelines—held back by regulatory inertia, risk aversion, or the absence of bold policy.
Ghana just changed that.
Egypt’s Policy Shift: A Catalyst for Local Funding
Egypt provides another compelling example of how regulatory mandates can stimulate local investment in innovation. In 2021, the Central Bank of Egypt (CBE) issued a directive requiring banks to allocate at least 25% of their lending portfolios to micro, small, and medium enterprises (MSMEs). This policy aimed to enhance financial inclusion and support the growth of SMEs across the country.
To facilitate this, the CBE encouraged banks to invest in direct investment funds and funds of funds that, in turn, invest in SMEs. Investments in the share capital of such funds were considered part of the banks’ required 25% allocation to SMEs. This approach not only increased the availability of capital for SMEs but also led to a surge in local funding and the establishment of new investment funds focused on supporting tech businesses and startups.
As a result, several Egyptian venture capital funds emerged, backing successful companies in the region. For instance, Algebra Ventures and Sawari Ventures have been instrumental in funding startups like Swvl, a transportation technology company, and Vezeeta, a digital healthcare platform. These investments have contributed to the growth of Egypt’s startup ecosystem and demonstrated the effectiveness of policy-driven financial inclusion strategies.
Why This Matters: A Flywheel for the Innovation Economy
When local pension funds invest in startups, something incredible happens:
- Capital flows into homegrown businesses.
- Value is created inside the continent.
- Exits return profits to pensioners—retired teachers, nurses, civil servants.
- The ecosystem matures from both ends: investors and innovators grow together.
It’s not just economic development. It’s ownership.
It’s circulating value rather than exporting it.
It’s building an African future funded by African belief.
AVCA Report: The Case for Local Capital in African VC
Bold Policy Backed by Courage
Ghana’s move stands out not just for what it proposes, but how it does it.
By requiring pension funds to allocate a fixed portion of their AUM to alternative assets—including VC and PE—the government isn’t just encouraging local investment. It’s institutionalizing it.
This level of commitment sends a signal to global investors: Ghana isn’t waiting for the world to bet on it. It’s betting on itself.
And that kind of signal matters. It builds confidence. It brings partners. It sets precedent.
What the Rest of the Continent Should Be Asking
- What if Nigeria did the same—with over $20 billion in pension fund assets?
- What if Kenya’s National Social Security Fund followed suit?
- What if South Africa recalibrated its asset allocation rules to support early-stage growth?
We’ve seen African founders rise to the challenge of building world-class companies. What we need now is more African capital to meet African ambition.
At Ingressive Capital, We’re Ready
At Ingressive Capital, we’ve backed over 50 early-stage African founders—many of whom went on to raise follow-on capital, scale across borders, and create jobs in their communities.
We know firsthand what African innovation can do.
We also know how hard it is to fund the first check, especially in nascent markets.
That’s why this policy matters so deeply to us—not just as investors, but as ecosystem builders.
Ghana Lit the Match. Who’s Next?
It’s easy to watch global headlines and wait for the tides to shift.
But progress in African tech won’t be led by outside forces. It will be built by bold decisions like this one—rooted in our realities, backed by our institutions, and designed for long-term prosperity.
Ghana just lit the match.
Let’s make sure the rest of the continent doesn’t miss the spark.
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— Maya Horgan Famodu
Founder & Partner, Ingressive Capital
