ImpactAlpha, Aug. 11 – Samuel Yeboah isn’t discouraged by the economic storm battering his home country of Ghana and many other emerging economies. “As Winston Churchill said, never let a good crisis go to waste,” he says.
The compounding crises of the pandemic, rising fuel and food prices from the Ukraine war and global inflation led Ghana to default on a sovereign debt load that consumed 70% of its revenues.
The bright spot is that local pension funds, insurance companies and other investors that were heavily exposed to government securities are looking for other places to invest their money. That’s leading them to impact investment firms like Mirepa Investment Advisors, which Yeboah and his business partner Enyonam Kakane set up in 2017 to invest in Ghana’s undercapitalized small businesses.
“All of a sudden there’s a scramble to diversify away from government, and pension fund managers are chasing alternative investment opportunities,” Yeboah tells ImpactAlpha.
Impact investing in Ghana
Impact fund manager was an unexpected career trajectory for the chemical engineer, who spent his early career in the US working for biotech companies Merck and Amgen.
When family brought Yeboah back to Ghana, he was inspired by his late mother’s example to redirect his work. “She was a teacher, then a civil servant. In her later years, she devoted her life to educating underprivileged girls who couldn’t afford to pay for education,” he recalls. “My sister and I grew up seeing her give. So the question for me was, ‘How do I give back?’”
Yeboah became the chief operating officer at a successful tech startup, then launched a business accelerator to help more Ghanaian founders succeed.
“We were shepherding them off a cliff,” he says matter of factly. There simply wasn’t enough investment capital coming into Ghana to support all of its entrepreneurial talent. He founded Mirepa to help address Ghana’s $5 billion annual small business financing gap.
Yeboah is seeking to help build a much bigger investment ecosystem. He was a founding board member of Impact Investing Ghana, the country’s national advisory board that is part of the Global Steering Group on Impact Investment. He’s also the executive committee chair for the Ghana Venture Capital Association, which is working to establish a code of conduct for domestic private investment firms.
Much of Yeboah’s work in these roles centers on investor education and confidence building in so-called alternative assets, like private equity and small business lending.
“Pension funds are mandated to invest in alternative assets, but they’ve felt it was too risky, so we’ve had this pot of money that’s just sitting there,” Yeboah says of Ghana’s roughly $4 billion pension industry. Last year, Injaro Investments became the first fund manager in the country to reach a first close anchored by local pension funds.
Mirepa followed, raising half of a targeted $10 million for its first fund, all from local investors. Impact Investing Ghana is setting up a fund of funds to usher more domestic institutional capital into local impact fund managers.
Yeboah has his sights on Africa’s high-net worth individuals to create family offices and foundations that will help small funds for businesses as well. Local investors will be key to unlocking capital for Africa’s small businesses and, in turn, economic growth.
“International agencies are happy to fund programs that unlock local capital, but they don’t want to fund the vehicles,” he says. “Locally, we need to come up with solutions that work for us and serve our long-term interests.”
