For years, capital has flowed into African businesses from vehicles structured elsewhere. But according to Winnie Odhiambo, Director, Investment Programs & Innovation, MEDA, that disconnect sends the wrong signal to investors, entrepreneurs, and to the continent itself. Speaking at SuperReturn Africa, Winnie made the case that domicile is not just a legal or operational choice. It’s a statement of belief. “You’re building businesses in Africa, but you’re not domiciled in Africa. That’s a crossroads.”

Leading by example
Domiciling investment vehicles on the continent, she argues, is about alignment. When funds are set up locally, they signal commitment to African SMEs and help crowd in additional investors who take confidence from that structure. It also sends a powerful message to founders: capital is being deployed from Africa, not just into it.

Building the ecosystem
Local domicile doesn’t just benefit investors, it builds industries. Fund administration, legal services, compliance and governance all rely on skilled professionals. Without funds domiciled locally, those skills never fully develop. Domicile, in this sense, becomes a foundation for long-term human capital growth.

Why policy signals matter
Winnie also pointed to regulatory progress as a turning point. Countries exiting the FATF grey list, including Nigeria and South Africa, send a strong signal that African jurisdictions are tightening frameworks, improving KYC standards, and actively de-risking investment environments. These changes matter, especially to institutional investors assessing long-term exposure.

Backing women, backing growth
Her perspective on gender was equally direct. Data shows women are strong credit risks but Winnie argues capital must go further. Supporting women-led funds enables investment in women-led SMEs, creating jobs and multiplying impact across communities. In her words, investing in women creates a virtuous cycle of growth.

Transcript:

I think domicile in Africa is a bold statement that an investment vehicle makes because most of the time you find the capital that you're trying to raise is not African capital, but you are investing in African businesses. So then you have a crossroad of, I'm building businesses in Africa, but I'm not actually domicile in Africa.

So the idea is to be able to preach water and drink water, not preach water and drink wine. Nothing wrong with drinking wine at all, but the point is you really wanna lead by example, right? And so I think domicile in Africa is that first step that you have to take if you want to invest in African SME.

So you have to lead by example by actually setting up your vehicle there. And what it does though is it gives a lot of comfort to other investors to crowd in, but also to your SMEs as well. When they are calling capital and you are disbursing from an African domiciled vehicle.

In addition to that, I think it's really good for the human capital in Africa too, because if we don't domicile in Africa. Like, where are we going to get the skillset? Fund administrators, legal professionals, trusts; all these are people who derive their income from fund administration. So if we don't build an industry that supports this, then we'll never have the human capital. So all these things I think are very important to ensure that we are domiciled in the continent.

I think a really big signal was the recent changes in the gray list. So there's a list somewhere that exists, a black list and grey list of countries, maintained by FATCA, the international body that oversees anti-money laundering and counter-terrorism financing measures taken by countries.

So, they rate different countries based on the risk profile, then they put you on the list. Of course, a couple of African countries were on the grey list , but they have done a lot of work with their governments to ensure they have come out of the grey list. Part of these countries was like Mauritius, which originally was not on the grey list bur then went back in due to allegations of money-laundering. But they worked so hard to ensure they tightened their processes and ensured they reduced the risks of money laundering. So, it could take you maybe two weeks to open an account in Mauritius, now it would probably take two months because they are so rigorous. The KYC checks are important, and they make sure through every step of the way they are de-risking an investment opportunity for an investor. So I think certain signals like counties coming out of the grey list send a very strong signal to investors.

Congratulations to Nigeria and South Africa, as they recently got out of the grey list, and I think more African countries need to really work hard on their policies and money-laundering provisions in their laws even, to ensure that they create conducive environments for investors.

You have to be intentional when it comes to making these investment decisions. Women have generally shown to be good credit, according to data from banks, who lend to women and record more than a 90% rate of repayment. So, yeah, we already have data that proves women are bankable, reliable and they mitigate risk.

They calculate risk before they make a big step. If I am going to take a loan, I really need to think about what I am going to use this money for; Is it going to grow my business? So, women are known to be good credit generally and we need to take it a step further. You are not just good credit, but a viable investment, I should invest in you right? I should support you to actually build a fund and to support you to then invest in women led SMEs to create jobs for women and youth especially. This is what we are all about at the Africa Growth Fund, we really aim at ensuring that we pass on the benefit all the way to the ultimate beneficiary who is the young woman, the young man. And so that's really the idea. If you invest in women, they will invest also in other women.

I think firstly, if you domicile in Africa, you are bringing foreign currency into Africa, as normally, people subscribe into funds with foreign currency and not local currency, this tends to be the truth across the board, and because a fund is raising in USD for example, you build a forex market as part of the way you raise funds. You are also able to build a new instrument and provide alternative investment opportunities, right?

Unlocking capital becomes complementary because if I am a pension fund manager, for example, I typically would invest in the capital markets because these traditional investments are considered a safe bet; they are listed and have liquidity. But if I am investing in alternative assets, they have proven to perform well, especially when there is an economic downturn. So, the idea is to crowd in more capital from these traditional pockets of capital alongside other like-minded investors, and you build a new asset class. You then have complementarity in terms of risk , and investing in these alternative assets creates innovation in our economies.

It is really circular in my mind, and I connect all the dots, and it makes a lot of sense as to why we need to support emerging managers. As a limited partner, we typically provide capital and a framework for governance to support the general partner who is the recipient of the investment funds. And so, we need to invest in structures that make sense for them. We will not force you to necessarily set up a fund, doe example, in a country where the laws do not provide for a general partner, limited partner type of structure. We kind of work with what makes sense and is practical, and we are creative and innovative in how we structure our funds. Its not a cookie-cutter solution for all, as each jurisdiction is different. In some jurisdictions, we have taken the view that we will be the sole investor in that vehicle and it works, because no other investor would take that first step.

We have good examples of investments where we are going to be a sole limited partner like in countries like Ethiopia and Rwanda. And the idea is that hopefully we will be able to catalyze other investors to come alongside. We also have really good examples of catalyzing local capital where local high net worth investors have supported our fund managers where investors come together in a vehicle and subscribe into the fund. So we have really good case studies and examples of real life situations and cases that have shown a lot of traction in that regard.