Africa is not short of capital. Between its sovereign wealth funds, pension funds, insurers and banks, the continent holds an estimated $4 trillion in domestic savings.
The difficulty is what carries it. As our Chief Investment Officer Anne-Marie Chidzero told the Allocator Media Podcast, African financial systems lack sufficient “pipes and filters and turbines” to move that money to where it is needed, equity for infrastructure, disaster-risk cover for smallholder farmers, aggregation vehicles that make small businesses investable at institutional scale.
Building those pipes is what FSD Africa Investments (FSDAi) was created to do. FSDAi the fund takes on early-stage risk that commercial investors will not, then works to make the resulting instrument replicable.
In the episode, Anne-Marie discusses the first African outcome-based conservation bond, the infrastructure equity fund structured with ARM-Harith so that Nigerian pension funds could participate, and the Africa Local Currency Bond Fund, where the mobilisation multiplier runs at roughly 10 to 1.
She is also candid about the limits. FSDAi has withdrawn from an investment during the approval process on finding that the market had developed its own appetite, and she is direct about how hard mobilisation is to attribute honestly.
“It takes patience… It takes a patient investor and it takes strong partnerships.” Anne-Marie Chidzero
