By Cynthia Alo

Investors Investors in private and venture capital market has said that local capital mobilisation must accelerate as traditional Western funding sources face growing uncertainty, highlighting an opportunity for African pension.

From left : Kola Aina, Founding Partner, Ventures Platform; Andrew Alli, Non-executive Director, British International Investment; Abi Mustapha-Maduakor, CEO of African Private Capital Association; Danladi Verheijen, Managing Partner, Verod; Olusola Lawson, Co-Managing Director, African Infrastructure Investment Managers and Genevieve Sangudi, Partner, Alterra Capital Partners, at the press briefing for the 21st Annual AVCA Conference & VC Summit, held in Lagos.

Speaking to journalists at the 21st annual African Private Capital Association (AVCA) Summit in Lagos, industry leaders said reduced U.S. development finance and tighter European budgets, alongside global shifts in geopolitical focus, were forcing African markets to rely more heavily on domestic investors.

Chief Executive Officer of African Private Capital Association (AVCA), Abi
Mustapha-Maduakor, noted that African institutional investors now account close to 40% of private capital flows, up from 20% three years ago describing it as “an opportunity for local pools of capital to step in and replace the capital gap.”

She stated: “When we look at the Limited Partners profile three years ago versus last year, the pendulum has swung: before, it was about 20% African institutional investors and 80% global, but now it’s 40% African institutional investors.

“It’s definitely an opportunity for local pools of capital to step in and replace the capital gap. More practically, it’s a call to action for us in Nigeria to strengthen local funding sources and rethink trade policies.”

While fielding questions on the impact of Donald Trump’s administration policy, she said that rising tariffs and supply chain disruptions were increasing the cost of imported raw materials for Nigerian manufacturers.

She urged policymakers to leverage trade policies to “improve domestic manufacturing and reduce reliance on imports,” adding that backward integration is no longer optional if Nigeria wants to protect consumers from rising costs.

On his part, Founding Partner, Ventures Platform, Kola Aina, said the current global uncertainty including the pullback of USAID funding should serve as a wake-
up call for African economies to look inward.
He said: “We can’t just perpetually rely on the benevolence of the US. It is time to rethink trade and investment strategies within Africa. The conversation has to shift to trade and investment. And I think that’s something that Nigeria, I’ve heard the Minister of Trade and Investment really focus on, particularly in light of the AFCTA. There’s so much more that we can do within the continent amongst ourselves as countries. And so we would like to focus on the silver lining that this presents.”

Also speaking,Genevieve Sangudi, Partner at Alterra Capital Partners said that despite the growing uncertainty around international development financing, African investors should view the moment as an opportunity to strengthen local production and trade.

She said : “In terms of the uncertainty and certainly for now, less capital coming from the U.S. development, the DFI, I think it’s also an opportunity,” Sangudi said. “The shift is not just necessarily going to be for the U.S. in the long term. I think we’re seeing European development finance institutions reducing some of their allocations just from a budgetary perspective and spending more on domestic, whether it’s defense, et cetera.”

She stressed that Africans must learn key lessons from past crises, particularly the COVID-19 pandemic, which exposed the continent’s dependence on external supply chains adding, “never let a good crisis go to waste. During COVID, we saw the limitations of just not having our own supply chains, right, on pretty basic stuff.”

“And so hopefully this crisis also leads us to focus on trade, focus on more sort of domestic production,” she added.

From a private equity perspective, Sangudi urged investors not to overstate the immediate impact of the shifting global environment.

She highlighted resilience across diverse portfolios, noting positive trends even in sectors affected by global realignments. “We have just invested in a tourism asset in East Africa. Looking at global tourism reports, tourism to the U.S. is declining sharply. So people are boycotting U.S. travel, and we’re seeing that it is giving us quite a positive bump,” she said. “Bookings have just accelerated pretty dramatically.”

Addressing Africa’s infrastructure investment gap, Co-Managing Director of African Infrastructure Investment Managers, Mr.Olusola Lawson said that there must be a shift from traditional models heavily dependent on government to commercially viable private-sector-driven solutions as opportunities still abound in the sector.
He said: “We are trying to invest in commercially interesting things, so we’re not a public benefit corporation. We think infrastructure is an exciting space. I think globally it is, right now, one of the most attractive investment sub-sectors.”

He explained that classic infrastructure models, where governments serve as the primary counterparties, have largely failed across Africa, particularly in Nigeria. “Those models have not worked in Africa by and large, and that’s because after COVID, we’ve seen weakening government balance sheets, utilities unable to make payments where due, and value chains, particularly in the energy sector, are challenged,” he noted.

According to him, investors should focus on areas within infrastructure showing secular growth trends, resilient irrespective of GDP fluctuations. “Data consumption on mobile phones is a good example. When people switch from old school phones to smartphones, their data consumption goes up seven times. it doesn’t matter if the economy is growing at minus three or plus four,” Adeeyo said. “The shift to clean energy and rapid urbanization are other powerful trends that create sustainable infrastructure demand.”

Adeeyo emphasized that choosing strong private sector counterparties, rather than relying on governments, is key. “Focus on telecommunications tower companies with mobile network operators as counterparties. In the energy space, provide directly to commercial and industrial customers. And in logistics, target ports with international clients,” he advised. “Those models work. They’re commercially attractive and have been able to attract investment.”
Meanwhile, AVCA and Nigeria’s Private Equity and Venture Capital Association (PEVCA) have agreed to merge in a bid to strengthen Nigeria’s private capital ecosystem and enhance regional investment flows.
According to the two firms, the merger combines AVCA’s 20 years of research and investor advocacy with PEVCA’s local industry networks and policy influence, which is expected to increase support for fund managers,attract international investors, and unlock domestic capital for sectors such as technology, infrastructure and agriculture.

Speaking on the partnership, Paul Botha (Metier), Chair of the AVCA Board, said: “This strategic merger signifies an important leap forward as we combine AVCA’s established industry position with PEVCA’s invaluable local insights to promote the interests of private capital stakeholders in Nigeria and beyond. We look forward to working with the PEVCA leadership to support Nigeria’s growth as a leading investment destination on the continent.”

Also , Dr Yemi Osindero, Managing Partner, Uhuru Investment Partners, said: “We are optimistic about the opportunities presented by this strategic partnership, and I am delighted to witness this pivotal moment for Nigeria’s private capital ecosystem. This merger allows us to build on the unique strengths of AVCA and PEVCA to deliver better value for investors, fund managers and the wider industry.”

Abi Mustapha-Maduakor, CEO of AVCA, added: “Nigeria plays a central role in Africa’s investment story, and this merger allows us to work more systematically with local actors to deepen engagement and deliver targeted support. By combining AVCA’s insights, research and convening power with PEVCA’s on-the-ground presence and network, we are better positioned to catalyse private capital that meets the region’s needs from infrastructure to industrial development and innovation. It’s a decisive step towards aligning local and continental efforts to deliver sustainable, long-term growth.”