Venture capital: prosperous in Africa, still timid in Morocco

Venture capital: prosperous in Africa, still timid in Morocco

By Nabil Ouzzane on 06/20/2022 at 9:07 p.m.

© Copyright: DR

Kiosk360. While the total capital investment raised in Africa reached 5.2 billion dollars, Morocco’s share was limited to 3% of this volume. This article is a press review taken from the daily Les Inspirations Eco.

The signals are green for the development of venture capital in Africa. But the trend is not evolving at the expected speed in Morocco. The finding is clearly underlined in the 2021 report of the African Private Equity and Venture Capital Association (AVCA), the main points of which are taken up by the daily Eco Inspirations in its June 21 edition.

It shows that the total capital investment raised in Africa reached 5.2 billion dollars. Morocco is far from appearing in the podium, the latter being monopolized by Nigeria (first with 23% of the aforementioned volume), South Africa (second with 17%) and Egypt (third with 15%). Morocco comes in 7th position in 2021 with a 3% share, after being 6th in 2020 and 8th in 2019.

In 2021, fundraising by all capital investors in Morocco reached 1.8 billion dirhams, according to figures provided by the Moroccan Association of Capital Investors (AMIC). Between 2017-2021, fundraising certainly reached a total amount of 6.9 billion dirhams, almost double the funds raised during the 2012-2016 period, but in value, the country is far from the mark.

Remember that venture capital, or Venture capital in English, is an equity investment by one or more investors in unlisted companies. The companies on which venture capitalists bet are companies in the creation phase, or in the early stages of their development, which need capital in order to finance their start-up and their initial research.

The usefulness of investment capital is not to be demonstrated. Quoted earlier by the daily, Tarik Haddi, president of AMIC, notably advances the arguments for improving the financial structure of invested companies, by strengthening their equity and improving their debt capacity, and therefore investment, long term. “Private equity also makes it possible to improve the institutional and managerial capacities of invested companies, but also to strengthen their social and environmental responsibility as well as the innovation and adaptability of their business model”, he specified.

For Haddi, the blocking factor lies in the fact that the investment capacity of Moroccan companies is currently constrained by a financial situation deteriorated by four successive exogenous shocks (Covid, Ukraine, drought and imported inflation). The solution: stimulus capital to allow these companies to continue to invest.

By Nabil Ouzzane

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