(African Development Bank ' ADB ')-the Board of Directors of the African Development Bank has just approved an equity stake of EUR 12.5 million in the first generation capital investment fund Adiwale Fund 1, targeting small and medium-sized enterprises (SMEs) with high growth potential in francophone West Africa.
With a target capitalization of 75 million euros, the Fund will acquire minority shareholdings in SMEs that are well established in their market, which have a competitive advantage and which can grow rapidly.
Geographically, the Fund will focus on a handful of countries where the Economic Outlook and its own networks open up opportunities. The average volume of the Fund's transactions will fluctuate between 3 and 8 million euros. Côte d'Ivoire, Senegal, Burkina Faso and Mali are the first targeted countries, before Togo, Benin and Guinea in a second phase. All are now poorly served by the global equity market.
The Adiwale 1 Fund will focus on three major sectors: consumer services (consumer goods and services, education and health, etc.), business services (transport services, logistics, it, Internet and construction) and the industrial sector (pharmaceuticals, agro-industry, chemicals, etc.).
"The Bank's investment in the Adiwale Fund 1 will improve funding opportunities and support for SME capacity building in francophone West Africa," said Alhassane Haidara (photo), head of the Division of Non-sovereign industries and services of the African Development Bank.
Launched in 2016, the management company of the Fund, Adiwale partners, relies on a team of seasoned West African professionals who cumulate, to them all, several decades of experience in capital-investment, operational activities , financing for development and asset management in Africa, Europe and the United States.
Thanks to the Bank's investment, this team should help recipient companies to create more value by improving their internal functions and applying best practices in governance.
In terms of development, the Bank's investment will finance the growth of African SMEs, resulting in the creation of jobs (direct and indirect, skilled and unqualified, for men and women) and in tax revenue. This will also benefit local entrepreneurs who will benefit from expertise in business management, while promoting regional integration, as the Fund would accompany companies seeking to expand regionally. Finally, this participation will promote practices of excellence in corporate governance and human capital development. The impetus for an increase in turnover and economic transformation.
The Fund's investment strategy echoes three of the Bank's high 5 priorities – industrialising Africa; Integrating Africa and improving the quality of life of people in Africa. It also responds to the objectives of inclusive economic growth and productivity enhancement enshrined in the Bank's 10-year 2013-2022 strategy.
Finally, it is in line with the West Africa regional integration strategy paper, which plans to strengthen it by investing in companies that will become regional economic actors.