Africa is home to some of the world’s most resilient and innovative businesses, many of which are Black-owned and locally led. Despite their promise and track record, these businesses often face significant structural barriers in accessing the capital they need to grow. This funding gap is not just an issue of equity; it represents a missed opportunity for investors seeking robust returns and long-term developmental impact.

Across the continent, businesses in sectors such as fintech, renewable energy, education, and healthcare are demonstrating world-class ingenuity. African fintechs, for example, pioneered mobile money and digital payment solutions years before similar models gained traction in more developed markets. This was not incidental innovation—it arose out of necessity, given the exclusion of large segments of the population from traditional financial systems.

Yet, the overwhelming majority of these businesses remain undercapitalised. The focus of many impact investors has traditionally been on end beneficiaries—customers, employees, and communities—while insufficient attention has been paid to who owns and leads these businesses. A growing body of evidence suggests that ownership and leadership play a critical multiplier role in achieving sustained impact.

According to analysis by The Guardian, eight of the ten African-based startups that raised the highest venture capital in 2019 were led by non-Africans. Furthermore, Google’s Black Founders Fund reported that just 3.11% of all investment in Africa since 2000—approximately $413 million out of $13.3 billion—was directed toward Black founders. These statistics highlight a structural blind spot in the global investment landscape.

This issue is not theoretical. Nearly 15 years ago, a West African-led infrastructure fund struggled for years to raise capital from international institutional investors. Ultimately, all backing came from within Africa, despite the fund’s clear alignment with investor interests—stable returns, low default rates, and high developmental impact. Meanwhile, international infrastructure funds with similar mandates secured global investment with greater ease.

Perception plays a critical role in these disparities. Discussions with international investors frequently revolve around Politically Exposed Persons (PEPs), suggesting an implicit assumption that business success in Africa is linked to political patronage or corruption. Additionally, African entrepreneurs who do not hail from prestigious Western institutions like Oxbridge or the Ivy League often find themselves at a disadvantage, despite the quality of their ideas and operations.

This perceived risk is not supported by the data. The Global Emerging Markets Risk Database (GEMs) Consortium reported in 2024 that average default rates in emerging markets from 1994 to 2022 stood at 3.5%, comparable to S&P’s B credit rating default rate of 3.4% and Moody’s B3 rating of 4.0%. These statistics debunk the myth of higher investment risk in African enterprises led by local founders.

Local entrepreneurs are often better positioned to design scalable, context-aware solutions to development challenges. Their deep-rooted commitment to their communities fosters resilience, allowing them to navigate economic volatility more effectively than externally led ventures. Moreover, Africa’s demographic dynamics underscore the urgency of inclusive investment: the continent’s working-age population is projected to increase by 450 million by 2035, making it the fastest-growing labour pool globally.

Recognising this opportunity, British International Investment (BII) is intensifying efforts to increase its engagement with Black-owned and led enterprises. As part of its 2022–2026 strategy, BII has committed to enhancing representation within its sub-Saharan Africa portfolio and is actively collaborating with other development finance institutions (DFIs) to accelerate capital flows.

This commitment is not merely symbolic. BII has backed Summit Africa, a Black-owned and managed investment manager in South Africa. Summit Fund I focuses on SMEs in underserved areas, investing in sectors such as education, healthcare, and financial services. To date, the fund has supported over 10,000 SMEs, delivered healthcare services to nearly 14,500 patients, and enabled tertiary education for around 2,000 disadvantaged students.

Similarly, BII is invested in H1 Capital, a South African renewables company addressing energy shortages while improving livelihoods through clean, affordable power. H1 Capital aims to supply cleaner energy to approximately two million households by 2035, with a strong emphasis on inclusive development.

BII has also established Growth Investment Partners (GIP) Ghana to provide long-term, predominantly local currency financing to SMEs. These businesses form the backbone of Ghana’s economy, representing over 90% of enterprises, contributing 60% to GDP, and accounting for 80% of employment. GIP offers a sustainable capital solution tailored to these vital contributors.

Complementing these investment efforts is the Ghana Investment Support Programme (GISP), a BII-funded technical assistance initiative. GISP works to enhance investment readiness among SMEs by improving financial management and ESG compliance, thereby increasing their ability to attract capital.

Internally, BII is also strengthening its operational inclusivity. This includes bolstering locally led origination teams, commissioning sector research, and enhancing African representation on investment committees. The goal is to deepen market understanding and better align investment practices with on-the-ground realities.

Ultimately, supporting Black-owned and led businesses in Africa delivers more than financial returns—it creates a ripple effect of socioeconomic benefits across communities. These enterprises are solving problems with insight and authenticity, and with the right capital, their capacity to scale and transform lives is unmatched.

By correcting historical funding imbalances and aligning investment with the continent’s demographic and developmental trajectory, the global investment community can unlock vast untapped potential—one inclusive investment at a time.