Fadilah Tchoumba, ABAN CEO, discusses the opportunities and challenges of cross-border investment in Africa, focusing on syndication, regulation, and investor confidence.

Opportunities for Facilitating Cross-Border Investments

There are many opportunities to facilitate cross-border investment in Africa, especially for early-stage investments. There are over 75 accredited business angels across 37 African countries. Early-stage VC companies are also deploying capital across markets. These entities help mitigate risks, understand regulatory landscapes, and ensure compliance for both investors and ventures.

Deal Flows and Syndication

Identifying, evaluating, and efficiently syndicating cross-border investment opportunities is crucial for mitigating risk and achieving scalability. Investors use networks like business angel networks, incubators, and accelerators to source ventures. Regulated and vetted online platforms also connect ventures with a wider range of investors. Standard due diligence focuses on local regulations, market potential, co-investment credibility, and compliance. Efficient syndication is achieved through a lead investor or platform that pools investor resources, spreads risk, and brings more capital. This model helps serve more ventures and scale them across borders.

Tax Treaties and Regulatory Harmonization

African cross-border investors utilize bilateral and regional tax treaties to reduce double taxation. Pan-African organizations like the African Union and the African Continental Free Trade Area (AfCFTA) are driving regulatory harmonization to ease venture scaling across the continent. Early-stage investment involves community-based due diligence, shared knowledge, and local co-investors to reduce country-specific risk and build scalable portfolios. Increased collaboration, driven by state-set standards, helps investors efficiently identify, assess, and syndicate resources.

Innovative Financial Vehicles and Co-Investment Platforms

Cross-border investing is often hindered by fragmented regulations, complex capital flows, and inconsistent tax regimes. Business angels and economic enablers are deploying strategies to influence regulatory formalization and advocate for investor-friendly policies. Organizations like ABAN and the African Venture Capital Association (AVCA) are involved in pushing for a more conducive environment. Public and private bodies are engaging in dialogue to showcase data and advocate for improvements.

Rwanda is a preferred domicile for early-stage Special Purpose Vehicles (SPVs) due to several factors:

• Registration

• 3% corporate income tax

• 0% tax on dividends and royalty payments

• No restrictions on foreign currency

• No restrictions on fund repatriation

• Tax treaties with over 12 countries

This framework helps SPVs succeed and increases cross-border investment.

We have taken action to increase local investor participation in early-stage investment. They started with local markets and have seen increased collaboration among local investors. A recent deal involved co-investment between a Nairobi-based business angel network and a Mauritius-based angel network in a Kenyan company. Co-investment is seen as the future, helping to de-risk due diligence and capital, and encouraging more investors.

Catalytic Africa Platform

Two years ago, ABAN launched Catalytic Africa, a platform that pooled investment from over 200 angel investors, investing in 15 African countries and benefiting 21 companies. Relying on business angels is crucial because they understand local risks and can provide confidence to other investors.

SPV in Rwanda

ABAN established an SPV in Rwanda as a driving vehicle for cross-border investment, focusing on climate financing. One of the first transactions involved six business angels from multiple African countries leveraging the SPV to invest in a Ghana-based company. This example demonstrates that collaboration and syndication are the way forward to accelerate the growth of early-stage ventures.