Black-owned and Black-led businesses across five African markets face a funding gap of $209bn, according to a new report launched by British International Investment, the UK’s development finance institution and impact investor, and Swedfund.
The report, ‘Understanding the Investment Gaps in Black-Owned and -led Businesses in Sub-Saharan Africa’, combines quantitative market analysis with stakeholder consultations to examine where these businesses are represented, the scale of their funding gaps and the factors shaping access to capital.
Covering South Africa, Nigeria, Kenya, Côte d’Ivoire and Senegal, the findings provide investors, fund managers and development finance institutions with a clearer picture of the barriers to capital and the scale of the investment opportunity across the five markets.
The research forms part of BII’s wider Black Ownership and Leadership for Development initiative, established in 2022 to help increase the flow of capital to Black-owned and -led businesses across sub-Saharan Africa.
Across the five markets, BOLD businesses account for between 89 per cent and 99 per cent of small businesses. By contrast, BOLD representation falls to 40 per cent of larger businesses in Kenya and 35 per cent in South Africa.
This highlights the challenges they face in growing into larger businesses, where greater volumes of finance are typically available.
The financing gap is similarly concentrated. BOLD businesses account for an estimated $209bn financing gap across the five African countries, around four times larger than for non-BOLD businesses. Across sub-Saharan Africa, the gap is estimated at $1.842tn.
Of the five countries, Nigeria has the largest BOLD funding gap at $131bn, followed by South Africa at $45bn and Kenya at $23bn. There are also gaps of $5.7bn in Senegal and $4.6bn in Côte d’Ivoire, demonstrating that the challenge is also significant in smaller markets.
The report finds that these barriers vary significantly by market, reinforcing the need for locally tailored investment strategies, financing solutions and technical assistance. In Kenya, stakeholders pointed to limited access to investor networks and early-stage capital. In Nigeria, access to hard-currency financing was a more prominent constraint.
Managing Director and Head of Africa, British International Investment, Chris Chijiutomi, said Black-owned and Black-led businesses are a driving force behind African economies, yet many continue to face significant barriers to accessing capital.
“Expanding opportunity for these businesses can help reduce inequalities, contributing to SDG 10, while unlocking their potential to drive growth, create jobs and foster innovation. This research gives us a clearer picture of the barriers that constrain funding and shows us how to take action.”
Regional Director for West Africa, Swedfund, Kitanha Toure, said: “For Swedfund, the insights from this research are directly linked to our institutional commitment to contribute to SDG 10, reduced inequalities. Our strategy focuses on increasing investment in low-income markets, improving access for the underserved, and strengthening local ownership and decision-making.”