Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity

The report examines the role of fund domiciles in Sub-Saharan African private equity, highlighting the dominance of Mauritius due to its tax efficiency and legal stability. While there is growing interest in onshore alternatives—particularly in South Africa, Kenya, Nigeria, and Morocco—the report finds that the high standards of legal, regulatory, and tax frameworks in offshore centres create a significant barrier to entry. It argues that donors should focus on strengthening the broader business environment and supporting private equity investment in SMEs rather than solely attempting to replicate administrative offshore hubs.

• Offshore jurisdictions are the standard for Sub-Saharan African private equity, with nearly 75% of surveyed General Partners (GPs) using them for their largest active funds. Mauritius is the most popular choice, followed by Jersey and Guernsey.
• Tax efficiency for distributions is the primary driver for choosing a fund domicile for GPs, while Limited Partners (LPs) place a higher premium on transparency.
• Mauritius is highly regarded by the industry, with 97% of GPs using it reporting satisfaction or high satisfaction, though Development Finance Institutions (DFIs) express more caution regarding transparency and harmful tax practices.
• South Africa is ranked as the most attractive onshore fund domicile in Sub-Saharan Africa, followed by Kenya, Botswana, and Nigeria.
• The quality of the local legal and regulatory environment is the primary inhibitor to the broader use of onshore jurisdictions, including South Africa.
• South Africa's effectiveness as an onshore hub is constrained by exchange controls, high corporate tax rates, and a restrictive immigration policy.
• Developing a local private equity industry that targets SMEs is likely to generate more economic development than simply establishing a fund domiciliation hub.
• Donors can support the development of onshore centres by focusing on four main areas: legal and regulatory reform, information provision, skills development, and subsidies.
• The report suggests that the most viable candidates for regional financial centres in Africa are Lagos, Nairobi, and Casablanca.

APA

FSD Africa (n.d.). Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity. https://fsdafrica.org/wp-content/uploads/2025/05/15-10-21-FSDA_EMPEA_Conduits-of-Capital_web_version.pdf

Chicago

FSD Africa. Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity. n.d. https://fsdafrica.org/wp-content/uploads/2025/05/15-10-21-FSDA_EMPEA_Conduits-of-Capital_web_version.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity |url=https://fsdafrica.org/wp-content/uploads/2025/05/15-10-21-FSDA_EMPEA_Conduits-of-Capital_web_version.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafricandconduits, author = {{FSD Africa}}, title = {{Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity}}, institution = {FSD Africa}, url = {https://fsdafrica.org/wp-content/uploads/2025/05/15-10-21-FSDA_EMPEA_Conduits-of-Capital_web_version.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }