A literature review by Cenfri for the Innovative Capital Mobilisation in Africa (ICAMA) initiative, implemented by GIZ, examining the regulatory conditions needed to support venture capital (VC) markets in Africa.

Africa’s path to prosperity requires strategic investment; however, there is a large funding gap, estimated at $ $1.3 trillion in 2024. Venture capital (VC) has an important role to play in closing this gap: it is increasingly recognised as a key source of funding for Africa’s growth enterprises (formal businesses with the ambition and capacity to expand through early-stage external investment) and the jobs they’ll generate.

Although there is a significant opportunity to expand VC on the continent, there is still a limited understanding of what is required to make VC markets function effectively. GIZ has launched the Innovative Capital Mobilisation in Africa (ICAMA) initiative to consider what can be done to unlock VC potential towards growth enterprises in Africa. As a starting point, GIZ partnered with Cenfri to do a literature review to identify the regulatory enablers required to support VC markets.

This report highlights the main regulatory barriers facing growth enterprises and venture capital investors and identifies regulatory enablers that have proven effective in supporting VC market development. The aim is to help policymakers, regulators, development finance institutions (DFIs) and investors make informed decisions and take practical steps to expand VC markets across Africa to, ultimately, support sustainable growth and development.