"You're building businesses in Africa, but you're not domiciled in Africa" says Winnie Odhiambo, MEDA

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're calling capital and you're dissing from an African vehicle. I think it sends a very strong message.

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 gonna get the skillset? Fund administration, legal, like professionals trusts 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. It's a blockchain and AGL list, gray list. And it's fatca, which is an international body that looks at anti-money laundering, that looks at counter financing of terrorism activities and all that.

So they rate different countries based on the risk profile. And then they put you on a list. So of course a couple of African countries, wine, the gray list, but they've done a lot of work as a government to ensure that these countries have come out of the grilly. So part of these countries was Mauritius.

Which originally was not on the re list, but then went back into the re list because of issues of money laundering. But they worked so hard to ensure that they tighten the whole processes and ensure that they reduce the risks of money laundering. So it was, it could take you maybe two weeks to open an accounting Mauritius.

Now it take you probably two months because they're so rigorous. The KYC checks are so important and like they make sure that through every step of their way they're like de-risking this opportunity for an investor. So I think certain signals like countries coming out of the s send a very strong signal to investors.

Congratulations to Nigeria and South Africa. They recently got outta the GR list. And I think more and more African countries need to like really work hard on, on their policy, on their money laundering kind of provisions in their laws even to ensure that they create congestive environments for investors.

You have to be intentional when it comes to making this investment decision. So partly it's women are generally good credits. So like data has shown that if a bank lends to women, there's a 90% plus chance of her paying back that money. Yeah. So already we are. We are having data that proves that women are bankable, reliable, that they mitigate risk.

They calculate calculate risk before they make an a big step. If I'm gonna take a loan, I really need to think about what am I gonna reuse this money for? Is it gonna grow my business C to C? So women are known to be good credit generally, and so we need to take it a step further. You're not, just a good credit, but I should invest in you, right? I should support you. To actually build a fund, and I should support you to then invest in women led SMEs and to create jobs for women and youth especially. And that's what we are all about on the Africa Growth Fund. We really aim at ensuring that we pass that 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 first, if you don't necessarily in Africa, you're bringing foreign currency, normally people subscribe into funds with foreign currency and not local currency. That tends to be the truth across the board. And so because you are raising capital in your dollar or renewal, you tend to really be able to build even a market just within the effect.

Part of the way you raise funds. So I think starting there, you're able to build a new instrument. You're able to bring in FX into the country in flows, foreign direct investments, you're able to also provide alternative investment opportunities, right? So the idea of unlocking capital is, for example, instruments that are traditionally available.

Then become complimentary because if I'm a pension fund, for example, all I do is typically invest in the capital markets because it's safe it's listed. There's some liquidity if it's fixed income. But if I'm investing in alternative assets, have proven to perform really well, especially when there's economic downturn. So the idea is to crowd in more capital from these traditional forms of or pockets of capital alongside other like-minded investors. And you build a new asset class, now you start talk about alternatives. You have complementary in terms of risk and you're also able to have innovation, right? So like venture capital would never exist if we never had funds, if we never domiciled funds, right? And all these startups that people are coming up with that grow and scale and become unicorns would never exist if then we didn't have venture capital funds. So I think it's all circular. In the sense that if you don't take that risk and put capital aside and invest in these vehicles, then we'll not really have innovation in our economies.

It's really circular in my mind, like I connect all the dots and it makes a lot of sense as to why we need to support this emerging manager. We are a limited partner. And typically as a limited partner, you provide capital, you provide a framework, you provide capital, you provide governance support to the general partner who's the recipient of the funds. And so what we've done really is we kind of work with the emerging managers to invest in vehicles that make sense for them.

We're not gonna force you necessarily to set up a fund. If, for example, in that country, the laws do not provide for general partner, limited partner type of structure. So we kind of work within what makes sense and what is practical to be able to set up funds that make sense for our emerging managers. So ideally we be creative and innovative in how we structure our funds. And it's not a cookie cutter solution. Each jurisdiction is different. And so for some jurisdictions we've taken the view. That we will be the sole investor in that vehicle and it works because no one else would do that if we didn't take the first step.

We have good examples of investments where we are going single LP into this countries like Ethiopia, Rwanda, where we are going to be sole LPs. And the idea is hopefully it'll be able to catalyze others to come along. We also have really good examples of now local capital where local high net worth individuals have also supported. Fund managers come together in a vehicle and then they're able to subscribe into the fund. So we have really good case studies and examples of real life situations, real life cases that have shown a lot of traction in that regard.