President and Chief Executive Officer of the African Finance Corporation (AFC), Samaila Zubairu, has called for greater participation by Nigerian pension funds and other African institutional investors in venture capital, warning that declining foreign funding is creating a major financing gap for African businesses.

Zubairu, who was represented by AFC Associate Vice President, John Stephan Kofi, at a venture capital roundtable in Lagos, stressed the need for African institutional capital to support businesses as foreign funding for the continent’s venture capital ecosystem declines.

He said African-focused fund managers raised about $107 million in 2025, representing an 87 per cent year-on-year decline, while the share of European investors, which historically provided a major portion of capital to African venture funds, fell from about 70 per cent between 2022 and 2024 to 21 per cent in 2025.

According to him, the decline in foreign funding makes it increasingly important for African institutions, particularly pension funds holding long-term domestic savings, to provide more of the equity risk capital required to build and expand businesses across the continent.

He noted that Africa’s digital economy is projected to contribute more than $700 billion to the continent’s Gross Domestic Product, while venture capital is increasingly supporting sectors beyond technology, including healthcare, agriculture, logistics and manufacturing.

Zubairu said the shortage of local risk capital was a major concern because African businesses needed equity funding to develop and expand, while pension funds had the long-term capital required to support such investments.

He disclosed that AFC had committed $100 million to Africa-focused technology fund managers as part of its strategy to increase institutional investment in venture capital.

Of the amount, $25 million had been committed to RCF Africa Fund II and $15 million to Future Africa Fund IV, leaving $60 million earmarked for additional fund managers currently under review.