African Private Equity & Venture Capital Association (AVCA), a non-profit organization, has committed $10 million each to the Nigerian and Ghanaian Small and Medium Enterprises (SMEs) industries.

While noting that the company currently has about 1,000 investments across Africa, Ms. Tokunboh Ishmael, the Chief Executive Officer of Alitheia Capital and one of AVCA’s board members, said private equity is crucial for SME sector financing.

“Private equity and venture capital plays a crucial role in financing the SME sector, which is the engine of economic growth the world over,” Tokunboh noted.

Ahead of the 11th annual conference of AVCA,  CEO of African Capital Alliance Mr. Okey Enelamah explained that with reported investment figures increasing to $3 billion in 2013, “private capital in Africa is chiefly growth investment, unlike the typical perception of private equity in more developed markets.”

“SME is key to real sector growth. In advanced economies, SMEs account for over 50 per cent of the volume of businesses transacted. If Nigeria must grow the double digits in financial inclusion, she definitely has to look at SME growth and provide all it takes for SME businesses to flourish in the country,” added Tunde Lemo, former Deputy Governor of Nigeria’s Central Bank.

In 2012, Nigeria, Africa second largest economy, reported that it has about 8 million SMEs employing about 42.4 million people and contributing about 46.5 per cent of nominal GDP.