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Unlocking venture capital and private equity for Africa's common interest11/10/2006. Source: African Venture Capital Association (AVCA).
 This paper presents the African Venture Capital Association's response to the Commission for Africa report which recommended a series of actions to provide crucial support for the Millennium Development Goals for Africa.
Central to the CfA's recommendations is a call for an additional $25 billion annually in aid over the next three to five years, with an additional $25 billion annually subject to review.
AVCA gives a resounding welcome to the CfA's report and appreciate the comprehensive work behind the recommendations that have been drawn up and we fully endorse its aims. We do however believe that much greater emphasis needs to be placed on private sector led initiatives and on the positive role that venture capital and private equity can play and suggest a much greater proportion of the financial resources be allocated to this.
AVCA makes four main recommendations to be included in the CfA's recommendations to the EU and G8 governments. These are the establishment of:
- An African Venture Capital Technical Assistance Fund (AVC-TAF) to support and improve the performance of SME investors in Africa
- An African Venture Capital and Private Equity Fund of Funds (AVC-FOF) as an incentive to further capital provision
- An African Venture Capital and Private Equity Tax Relief (AVC-TR) scheme to encourage more private investment in African Private Equity
- Capacity Building for AVCA, which as the only pan-African representative of the African venture capital and private equity industry, is well positioned to promote and stimulate the industry
The contribution of the private sector to Africa's continued development requires further emphasis and in this response, AVCA draws attention to a direct relationship between private sector investment and poverty alleviation in Africa. Enterprises backed by venture capital and private equity are confirmed as key drivers of growth and sustainable development. The investors' local expertise and flexible approach to financing have resulted in significant growth and profitability for the companies involved. The consequent impacts these companies have had on their local communities (and the wider economy) cannot be overstated. They provide employment, education, skills, healthcare, infrastructural development, housing, security and are an enduring source of opportunity and empowerment to Africa's most needy.
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The African Venture Capital Association (AVCA) represents the private equity and venture capital industry in Africa. AVCA was established in 2002 and its head office is in Yaoundé, Cameroon. AVCA's activities include an annual industry conference, a quarterly newsletter, research, and training and advocacy programs. For more information visit the AVCA website at www.avcanet.com
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