Private equity financing in Ghana: Trends, challenges, and regional comparisons

INTRODUCTION

PRIVATE equity (PE) and venture capital (VC) have become increasingly vital instruments for fi­nancing high-growth enterprises, especially in regions where traditional financial interme­diation remains underdeveloped or exclusionary. In many developing economies, access to long-term capital through conventional banking systems is often limited by stringent collateral requirements, high interest rates, and short loan tenures—factors that dispropor­tionately affect startups and SMEs. Consequently, alternative invest­ment vehicles such as PE and VC have emerged as viable solutions for bridging the capital gap while simultaneously introducing strate­gic guidance, governance support, and innovation incentives into growing firms.

In Sub-Saharan Africa, the role of private equity is evolving rapidly, moving from niche capital deployment to a broader develop­mental finance mechanism. Coun­tries like Nigeria, Kenya, South Africa, and increasingly Ghana are becoming attractive destinations for private capital due to their growing populations, expanding consumer markets, and improving regulatory regimes. According to the Africa Private Capital Activ­ity Report (AVCA, 2023), West Africa accounted for 28 per cent of all PE deals in Africa in 2022, with Ghana being among the top recipients of PE inflows in the region. This growth is driven by a combination of political stability, a burgeoning middle class, digital transformation, and a vibrant entrepreneurial ecosystem.

In the Ghanaian context, private equity is now widely regarded as a transformative force for industri­alisation and economic diversifi­cation. As traditional sectors such as mining and oil plateau in terms of job creation and innovation, PE is increasingly targeting high-po­tential segments like agriculture, healthcare, education, logistics, re­newable energy, and fintech. These sectors not only present strong return potential but also align with Ghana’s broader development goals, including those articulated in the Ghana Beyond Aid Agenda and the Ghana CARES ‘Obaatan Pa’ programme.

Moreover, PE investment goes beyond capital injection. It often includes active participa­tion in corporate governance, risk management, and market expansion—components that are particularly crucial for startups and small to medium enterprises (SMEs) in emerging markets. The partnership-oriented model of PE also facilitates knowledge transfer, talent acquisition, and adherence to global environmental, social, and governance (ESG) standards. For Ghanaian firms aiming to scale across borders or tap into interna­tional markets, these attributes are game-changing.

Despite these promising de­velopments, the PE ecosystem in Ghana is not without its challeng­es. Legal and regulatory bottle­necks, a limited pool of institution­al investors, and underdeveloped exit markets continue to constrain the full realization of private eq­uity’s potential. Nevertheless, with deliberate policy support, better access to domestic capital, and growing interest from international limited partners (LPs), Ghana is well positioned to consolidate its gains and become a competitive hub for private capital deployment in West Africa.

This article explores the trajec­tory of private equity in Ghana by examining its market trends, regulatory environment, operation­al challenges, and developmental impact. It also situates Ghana within the broader African invest­ment landscape and offers strategic recommendations for strength­ening the sector’s contribution to inclusive and sustainable economic growth.

Ghana’s Private Equity

Market:

Overview and Trends

As of 2023, Ghana’s private equity sector was valued at around USD 6.8–7 billion in total assets under management, with about 35 active PE/VC firms either operating directly or through re­gional offices (ICLG, 2023). Ghana stood at 10th place among African nations for PE inflows, bringing in over USD 291 million in private equity just in 2023 (ABC News Ghana, 2023).

Several public institutions are pivotal in shaping Ghana’s PE landscape, including the Venture Capital Trust Fund (VCTF), De­velopment Bank Ghana (DBG), and the Securities and Exchange Commission (SEC). However, despite their efforts, Ghana still lacks a comprehensive legal frame­work for limited partnerships—an internationally favoured structure for PE/VC—which forces many funds to set up shop in Mauritius or other locations (B&FT, 2022).

Challenges Facing PE Financing in Ghana

Regional comparisons

When you stack Ghana up against Nigeria, Kenya, and South Africa, it’s clear that Ghana’s private equity (PE) scene is on the smaller side and grappling with more legal challenges. In contrast, Kenya and South Africa boast stronger legal frameworks and a higher level of participation from institutional investors, which makes them more appealing to PE fund managers (AVCA, 2023).

Case examples of private equity success in Ghana

Several high-profile transactions have demonstrated the potential for private equity to drive impact in Ghana. One notable example is PEG Africa, a solar energy com­pany that secured $25 million from CDC Group (now BII) in a Series C round. This investment enabled the firm to expand its pay-as-you-go solar products across West Africa, directly contributing to the UN Sustainable Development Goals (AVCA, 2022).

Another example is Injaro Agri­cultural Capital, which has invested in agribusinesses including Agro­Centa and Burro Ghana, facilitat­ing market access for smallholder farmers. These deals illustrate how PE can target social impact while delivering competitive returns. The Tide Africa Fund, led by TLcom Capital, and the Future Africa Collective, though based regionally, have also shown growing inter­est in Ghana’s tech and logistics sectors.

Future outlook and

recommendations

Ghana’s private equity market has strong future potential, par­ticularly if regulatory reform and domestic capital mobilisation are prioritised. The Limited Partner­ships Bill, once passed, is expected to unlock local domiciliation of funds, reduce tax inefficiencies, and attract more institutional capital. Simultaneously, initiatives by Development Bank Ghana—in­cluding a fund-of-funds model—are aimed at de-risking early-stage investments and encouraging private-sector participation.

Encourage pension fund par­ticipation through investment guar­antees and education, Deepen local capital markets to facilitate exits via IPOs or structured secondary sales, create public-private working groups to align regulation with investor expectations, Promote di­aspora investment vehicles tailored to the Ghanaian entrepreneurial context.

Impact on SMEs and

job creation

One of the most powerful ar­guments for scaling private equity in Ghana lies in its potential to transform SMEs—the backbone of the economy. SMEs account for over 85 per cent of employment in Ghana and nearly 70 per cent of GDP, yet they often struggle to ac­cess the long-term growth capital needed to professionalize, digitize, and scale operations (IFC, 2022).

Private equity provides not just capital, but strategic input—sup­porting SMEs with governance structures, market expansion, and human resource development. Research by Dalberg (2023) shows that PE-backed SMEs are more likely to formalize, pay taxes, and create decent jobs compared to their counterparts reliant on infor­mal financing.

Gender and inclusive

Private Equity

Despite rising awareness, wom­en-led enterprises still receive a disproportionately low share of private equity capital in Ghana and across Africa. A 2023 report by GenderSmart and AVCA found that only seven per cent of PE/VC funding in Africa went to female-led businesses.

Closing this gap requires inten­tional strategies, such as: Establish­ing gender-lens investment funds, requiring gender disaggregation of investee data.

Offering incentives for gen­der-balanced boards and leadership in portfolio firms.

The Role of ESG and

Sustainable Investment

Environmental, Social, and Governance (ESG) criteria have become standard practice in global investing, and Ghana’s PE landscape is no exception. Most in­ternational funds now apply ESG screening and reporting as part of their due diligence and port­folio management. This includes commitments to decarbonization, responsible employment practices, and anti-corruption policies.

Conclusion

Private equity is no longer a niche segment in Ghana’s financial landscape—it is a growing force for innovation, job creation, and institutional maturity. However, the sector remains constrained by regulatory gaps, a limited exit environment, and macroeconom­ic volatility. Unlocking the full potential of PE requires targeted reforms, capacity building, and inclusive policies that align capital with national development goals.

As Ghana prepares to position itself as a regional investment hub, attention must shift from mere capital attraction to ecosystem building. This includes empow­ering SMEs, integrating ESG, supporting women-led ventures, and fostering transparency. With the right mix of policies and private initiative, private equity can become a true engine of sustain­able development in Ghana.

The writer is the Chief Ex­ecutive Officer of Gold Coast Advisors

BY RICHARD A. WIAFE