Ghana’s Venture Capital Trust Fund (VCTF) is aiming to secure US$120 million by 2030 in order to establish a self-sustaining venture capital ecosystem.
This aims to strengthen the venture capital landscape in Ghana, creating a robust environment for startups and SMEs and ultimately contribute to the country’s broader economic development goals.
The target, outlined by the Fund’s General Manager Percival Ofori Ampomah during a recent media engagement, highlights the VCTF’s strategy to address systemic issues and attract sustainable financing.
To achieve self-sustainability by 2030, VCTF projects that it will require an additional US$10 million annually from government over the next few years.
Mr. Ampomah noted that VCTF has already received US$40 million from the Ministry of Finance under the Ghana Economic Transformation Project (GETP) to establish new funds. However, the long-term goal is to secure a stable, permanent source of funding to ensure continuous support for small and medium-sized enterprises (SMEs) in the country.
He emphasised the need for legislative reforms to update the Venture Capital Trust Fund Act, which has become outdated after two decades. The current Act still references the National Reconstruction Levy, a funding source that was repealed years ago – highlighting the need for a review.
“Our immediate focus is to revise the Act to align it with the current economic landscape,” Mr. Ampomah explained.
“We plan to engage policymakers extensively next year, to push for changes that will create a more sustainable funding framework for the trust fund. Without such reforms, our capacity to attract and deploy capital effectively remains limited,” he stated.
One of the significant challenges VCTF faces is a preference among foreign investors to domicile funds in Mauritius rather than Ghana. This has resulted in a substantial portion of investment capital remaining offshore, despite being directed toward projects within Ghana.
Mr. Ampomah pointed out that 90 percent of these funds do not stay in the country, limiting potential impact on the local economy.
“The current structure of limited liability companies used for investments in Ghana is not well-suited for private equity. We aim to resolve this issue next year by introducing a more compatible investment vehicle, making Ghana a more attractive destination for private equity funds,” he said.
The demand for venture capital in Ghana far exceeds the current supply, according to research commissioned by VCTF between 2019 and 2020. The SME sector requires around US$15 billion to meet its financing needs, a stark contrast to the US$70 million available in venture capital funds.
The General Manager acknowledged the significant gap, stating: “We currently do not even have 10 percent of the required capital. It is a long journey, but we are making strides by involving local investors -including pension funds, which have already contributed US$15 million”.
Mr. Ampomah noted the crucial role of local investors in attracting foreign capital, given that foreign investors are more likely to commit funds if they see significant local participation.
“Many foreign investors ask if there is local money on the table before they decide to invest. By taking the lead in signing the first check, VCTF sets an example and creates confidence among potential investors. This approach has made VCTF a catalyst in the investment landscape, anchoring funds and signalling trust in vetted fund managers,” he said.
Local capacity
To build local capacity, VCTF is running the Venture Capital Accelerated Analyst Programme, which aims to train fund managers and analysts in asset management.
This initiative, now in its second year, seeks to address a shortage of qualified fund managers in the country.
Mr. Ampomah highlighted the importance of this programme, saying: “When you have capital ready for investment, it can be surprisingly difficult to find competent managers to handle it effectively. We are training the next generation of fund managers to fill this gap”.
VCTF is also actively participating in the Ghana Digital Acceleration Programme (GDAP) under the Ministry of Communication and Digitalisation. The initiative focuses on supporting digital startups and small businesses over the next five years, signalling a shift toward prioritising digitalisation and technology in their investment strategy.
Mr. Ampomah outlined this direction, noting: “Our investments will increasingly target sectors such as technology, AgTech, insurtech and climate-related projects. These areas are aligned with the government’s strategic focus and present significant growth potential”.
