Press release -
Investment to strengthen small and medium sized companies in Francophone Africa
On December 31, 2023, Swedfund, Sweden’s Development Finance Institution, invested 15 MEUR Joliba Capital Fund I. The investment will enable growth of small and medium sized companies which are key for private sector growth and job creation in the least developed regions of Francophone Africa.
There is a great need to create more job opportunities in the formal sector in the French speaking West- and Central Africa. By investing in Joliba Capital Fund I, Swedfund will contribute to increased access to capital for small and medium sized companies (SMEs), which is expected to support socio-economic development via job creation and local income and tax generation.
In 2022, the inflation in Sub Saharan Africa amounted to c. 14%, primarily due to higher food and energy prices impacting commodity-importing countries. West Africa has been affected to a higher extent, mainly due to high inflation in big economies, e.g. Ghana and Nigeria. However, the macroeconomic development in the countries in focus for Joliba Capital is more stable and the inflation is lower.
Apart from Joliba Capital there are few other actors in the region with a focus on growth investments in SMEs, making Swedfund’s investment crucial for SMEs in need of growth capital.
- We are happy to be part of Joliba’s first fund, which will invest in sectors like financial services, consumer goods, insurance, and education. This gives Swedfund the opportunity to strengthen the private sector and to contribute to socio-economic development via increased decent job opportunities and enhanced gender equality. The investment will also support improved access to goods & services for the underserved, says Sofia Gedeon, Investment Director Sustainable Enterprises at Swedfund.
To enhance cross-country collaboration within Francophone West and Central Africa, two unions have been formed: WAEMU and CEMAC. The unions form a basis for social and economic development by establishing a common open market, external tariffs and commercial policies. Both WAEMU and CEMAC are pegged against the Euro to enhance monetary stability.
Joliba Capital Fund I will be supported by DFIs such as Proparco, FMO, U.S. International Development Finance Corporation (DFC), and the International Finance Corporation (IFC), a member of the World Bank Group. Joliba Capital is working in close partnership with LBO France, which is investing in the fund and enabling operational support apart from also being the majority owner of the general partner managing the Fund.
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About Swedfund
Swedfund is Sweden's development finance institution with the mission to contribute to poverty reduction through sustainable investments in developing countries. Our investments in the private sector contribute to a growing number of jobs offering decent working conditions and increases access to essential products and services like electricity and healthcare. Climate and gender are themes that permeates our investment process.
Swedfund invests in energy & climate, financial inclusion and increased access to capital for micro, small and medium-sized companies as well as healthcare and digitalization.
We are part of Swedish development corporation, and we measure and report all our results. As a state-owned company, Swedfund is managed by the Ministry of Enterprise and Innovation. We are financed through reflows from the portfolio and capital injections from the development assistance budget. The return from the portfolio finances our operations and we reinvest reflows from our portfolio in new projects, i.e. we recycle our capital injections.
For more information: please visit www.swedfund.se/en| www.edfi.eu
