The Africa Finance Corporation (AFC) announced that its board has approved a commitment of $100 million to invest in Africa-focused technology fund managers. This decision comes amid increasing interest in the continent's emerging digital economy and concerns about the challenges of mainstreaming its funding.
The digital economy is projected to contribute over $700 billion to Africa's output by 2050, with many analysts viewing it as the most significant development for the continent's economy in the coming years. Driven by a digitally connected youth population, it is expected to deliver much-needed demographic dividends. With about 530 million young people aged 15 to 35, and a third of them unemployed, growth in various areas of the fast-expanding digital economy could help address youth restiveness.
Despite this momentum, a statement from AFC noted that a persistent gap in long-term institutional capital continues to hinder the development and scaling of high-potential technology businesses. Through this commitment, AFC will deploy catalytic capital into leading Africa-focused technology funds and African-owned fund managers. The corporation aims to address the underrepresentation of local capital in venture funding by encouraging more participation from African institutional investors and fostering deeper local ownership within the ecosystem.
AFC hopes to capitalize on the growing African venture capital ecosystem, which has demonstrated significant potential. The continent has produced nine unicorns, and some leading fund managers have generated returns of up to 128 times the original invested capital, according to reports. Last year alone, African startups raised $3.8 billion, yet local institutional capital remains largely absent from many fund cap tables. Most venture funding comes from international sources, a trend that AFC's commitment aims to change.
Samaila Zubairu, President and CEO of AFC, stated: "Across the continent, young Africans are not waiting for the digital economy to arrive; they are seizing the moment — adopting technology, creating markets and solving real economic problems faster than infrastructure has kept pace. That is the investment signal. The AFC's $100 million Africa-focused Technology Fund will accelerate the convergence of growing demand, rapid technology adoption, youthful demographics and the enabling infrastructure we are building. Digital infrastructure is now as fundamental to Africa's transformation as roads, rail, ports and power – enabling productivity, payments, logistics, services, data and cross-border trade, while creating jobs and industrial scale."
As part of the initial deployment, AFC has made anchor commitments to Lightrock Africa Fund II and Future Africa Fund III, positioning the corporation across the full innovation lifecycle — from early-stage venture capital through to growth-stage scaling, the statement said. These initial commitments represent the first tranche of a broader deployment, and the organization is actively evaluating a pipeline of additional Africa-focused funds spanning a range of strategies and stages.
