AFC’s Zubairu: Nigeria, Africa Cannot Rely on Foreign Investors for Risk Capital
By Aboki Forex —
Samaila Zubairu, President and Chief Executive Officer of the African Finance Corporation (AFC), has called for greater participation by Nigerian pension funds and other African institutional investors in venture capital. He warned that declining foreign funding is creating a major financing gap for African businesses.
Zubairu spoke at a venture capital roundtable in Lagos. He was represented by AFC Associate Vice President John Stephan Kofi.
Foreign funding falls sharply
Zubairu said African-focused fund managers raised about $107 million in 2025. That represents an 87 per cent year-on-year decline.
He also said the share of European investors fell from about 70 per cent between 2022 and 2024 to 21 per cent in 2025. European investors had historically provided a major portion of capital to African venture funds.
According to him, the decline in foreign funding makes it increasingly important for African institutions to provide more of the equity risk capital needed to build and expand businesses across the continent. Pension funds, which hold long-term domestic savings, are central to that push.
The AFC chief’s remarks come as African venture funds face a tougher fundraising environment. The drop in European participation is significant because European investors had historically supplied a major share of capital to African venture funds. That shift has left a gap that African institutions must help close, he said.
Digital economy and wider sectors
Zubairu noted that Africa’s digital economy is projected to contribute more than $700 billion to the continent’s Gross Domestic Product. Venture capital is also increasingly supporting sectors beyond technology, including healthcare, agriculture, logistics and manufacturing.
He said the shortage of local risk capital was a major concern. African businesses need equity funding to develop and expand, while pension funds have the long-term capital required to support such investments.
AFC commits $100 million
Zubairu disclosed that AFC had committed $100 million to Africa-focused technology fund managers. The move is part of its strategy to increase institutional investment in venture capital.
Of the amount, $25 million had been committed to RCF Africa Fund II and $15 million to Future Africa Fund IV. The remaining $60 million is earmarked for additional fund managers currently under review.
The message matters for Nigerian businesses because foreign venture funding is shrinking. More local institutional capital would give African companies another source of equity risk capital as they seek to develop and expand.