UK Diaspora Investing in Africa | ARK Group International

In short

UK-based members of the African diaspora can back growing African businesses by investing directly, through angel networks, regulated platforms or funds, or by giving skills and connections. ARK’s research found that many losses come from informal investing, with no contract or oversight, so the route matters as much as the business. This is general information, not advice or an offer.

Many people of African heritage living in the UK already support back home: they send money to family, back relatives’ businesses and share what they know. Many also want to invest in businesses that create jobs at home and earn a financial return.

This guide explains the main routes a UK-based investor can use to back growing businesses in Africa, what ARK’s research found about why diaspora investments go wrong, and the checks and protections to understand before committing money. It is general information. It is not financial, tax or legal advice, and it is not an offer or an invitation to invest in anything.

Key takeaways

About 1.5 million people in England and Wales gave their ethnic group as African in the 2021 census, up from 990,000 in 2011.
ARK’s research in Ghana and Sierra Leone found that most diaspora investment is informal, and that informal investment carries the highest risk of loss.
Formal routes, such as regulated platforms, funds and organised angel networks, come with contracts, checks and reporting.
Investing in growing businesses is high risk. The FCA suggests keeping high-risk investments to no more than 10% of your net assets, and UK compensation schemes are unlikely to cover them.

What counts as diaspora investment?

Diaspora investment is money invested in African businesses by people of African heritage living abroad. It is driven by two things at once: a connection to home, and the wish for both a financial return and a lasting impact. ARK’s research found that diaspora investors also bring what money alone cannot, such as know-how and access to markets.

It is different from sending remittances, although the two are often confused. ARK’s study of Ghana for the International Growth Centre (opens in a new tab) sets out the distinction.

Remittances and diaspora investment compared
Compared	Remittances	Diaspora investment
Purpose	Support for family or household spending	Growing a business or project, with a return expected
Who receives the money	Relatives or friends	A business, cooperative, project or government
What the sender gets back	Nothing is owed in return	Shares, a loan to be repaid or another financial claim
Paperwork	Usually none	A contract that sets out each side’s rights

The difference matters because many diaspora investors use remittance habits for investment: they send money to a relative to invest on their behalf, with nothing written down. That is where many of the losses uncovered through ARK’s research began.

How large is the African diaspora in the UK?

Large, and growing. In the 2021 census, 1.5 million people in England and Wales, 2.5% of the population, gave their ethnic group as African (opens in a new tab), up from 990,000 in 2011, and 270,768 gave Nigeria as their country of birth (opens in a new tab). ARK’s research in Ghana and Sierra Leone found that the UK is home to some of the largest communities from both countries abroad, with Sierra Leoneans concentrated in London, Reading and Manchester.

How much these communities invest at home is not known. Neither country has reliable data on diaspora investment, as distinct from remittances, which is one reason ARK is building the evidence base.

What ARK’s research found about diaspora investment

ARK’s Managing Director, Joevas Asare, led two studies for the International Growth Centre, published in November 2025: one on Ghana, based on consultations with 27 institutions, and one on Sierra Leone, based on 30. Four findings matter most to an investor in the UK.

The appetite is there on both sides. Governments, businesses and the diaspora all want more diaspora investment, and see diaspora investors as bringing knowledge and access to markets as well as money.
Most diaspora investment is informal. Money typically moves through relatives, friends or middlemen, with no contract and no independent oversight.
Informal investment is where money is lost. People consulted described a high “burn rate”, meaning the likelihood of losing money, for investments made through personal networks. Stories of those losses spread quickly and put other investors off. The good experiences came through formal, well-governed and regulated platforms.
Diaspora investors are patient and want visible impact. Compared with other foreign investors, they tend to be more patient about returns and more committed to the difference their money makes. The Ghana study (opens in a new tab) gives the example of an investor wanting to be able to say “my investment helped build this farm”.

For a diaspora investor, the route matters as much as the business.

Six ways to back a growing business in Africa from the UK

There is no single best route. Each suits a different investor, amount and appetite for risk, and each offers different protection. The routes are described here in general terms; none is a recommendation.

1. Investing directly in a business you know

This is the most common route, and the one with the least protection. It usually means putting money into a business run by family, friends or a contact, in return for shares or as a loan. It can work well when the agreement is written down, the company is properly registered and the investor receives regular, honest reporting. It goes wrong when money is handed over on trust alone. Investors who move back to run a business themselves face a different challenge: ARK’s Ghana study found that returnees can struggle when local systems work differently from those they are used to.

2. Joining an angel network or syndicate

Angel investors are individuals who invest their own money in early-stage businesses, often in groups that share the work of finding and checking opportunities. The Ghana study (opens in a new tab) found angel syndicates to be one of the most active channels for early-stage investment there, often pooling money from professionals in the diaspora, though it found few networks dedicated to the diaspora. In the UK, firms that promote high-risk investments must follow FCA rules (opens in a new tab) that include prominent risk warnings and checks that the investment is appropriate for you.

3. Investing through a regulated platform

Crowdfunding and lending platforms pool money from many investors and pass it to businesses the platform has checked. In Ghana, ARK’s research (opens in a new tab) found platforms used by diaspora investors accepting amounts from as little as US$250 to around US$50,000, mostly as loans, under crowdfunding guidelines issued by the country’s Securities and Exchange Commission in 2024. Check who regulates a platform before you use it. A platform authorised by the FCA brings some UK protections; one regulated only in another country brings that country’s protections, which may be weaker or harder to use from the UK.

4. Investing through a fund

Private equity, venture capital and impact funds invest in a portfolio of businesses on behalf of their investors, which spreads the risk and puts professional checks in place. Most are open only to institutions and to wealthy or professional investors, and money is usually committed for many years. The Ghana study (opens in a new tab) estimated that about 33 such funds invest in Ghana, many of them based offshore, and noted discussion of a fund dedicated to diaspora investment, though none had been set up.

5. Buying diaspora bonds

A diaspora bond is a bond a government sells to its citizens and descendants abroad, usually to pay for development projects. Ethiopia, Nigeria, Kenya and Ghana have all run diaspora bond programmes, with varying success. A 2024 feasibility study for Sierra Leone, reviewed in ARK’s Sierra Leone research (opens in a new tab), identified fixed interest rates, clear repayment guarantees and regular reporting among the reasons programmes succeed, and a lack of trust, weak marketing and overly complex structures among the reasons they fail. Diaspora bonds lend to a government rather than to businesses, so they back growing businesses only indirectly.

6. Giving time, skills and connections

Money is not the only contribution. Both of ARK’s studies found diaspora professionals giving expertise, mentoring and help with investment readiness and funding proposals, before investing or instead of it. Introductions to customers, suppliers and investors in the UK can be worth as much to a growing business as cash, and they put none of your savings at risk. For founders you support, our guide to becoming investment-ready sets out what investors will check.

The six routes at a glance
Route	What protects you	Main risks
Investing directly	Only what your own agreement says	No checks or oversight unless you arrange them
Angel networks	Shared checks and a written investment agreement	Early-stage businesses often fail, and money is tied up for years
Regulated platforms	The platform’s checks and its regulator’s rules	Loans can go unpaid; protection depends on where the platform is regulated
Funds	Professional management and a spread of businesses	Usually open only to wealthy or professional investors; money committed for years
Diaspora bonds	The issuing government’s promise to repay	Terms can change if the government restructures its debts
Time and skills	No money at stake	Your time, and your reputation if you back the wrong business

What are the risks of investing in African businesses?

Growing businesses can do very well, but many fail, and investing from abroad adds risks of its own.

You can lose everything. The FCA warns that high-risk investments carry the very real risk of losing some, or even all, of your money (opens in a new tab).
Your money is tied up. Shares in a private business are hard to sell, and returns, if they come, can take many years.
Currencies move. A return earned in cedis, naira or leones can be worth much less in pounds if the local currency falls.
Distance makes oversight harder. It is difficult to see how money is being used from the UK, which is why written agreements and regular reporting matter.
Country risk. Changes in government policy, regulation or the wider economy can hurt a business, however well it is run.
Scams exist. The FCA advises treating all unexpected calls, emails and messages with caution (opens in a new tab), and hanging up if you feel pressured to act quickly.

Because of these risks, the FCA suggests keeping high-risk investments to no more than 10% of your total net assets (opens in a new tab), with the rest spread across mainstream investments. Its first question for any investor (opens in a new tab) is whether they can afford to lose the money.

What protection do UK investors have?

Less than many people assume. The Financial Services Compensation Scheme can pay up to £85,000 per person, per firm (opens in a new tab) if an investment firm fails and cannot return money or assets it holds for you. It covers only firms authorised by the FCA or the Prudential Regulation Authority, carrying out regulated activities, and it does not pay out because an investment performs badly. The Financial Ombudsman Service settles complaints about authorised firms.

Most investments in African businesses fall outside these schemes. A business or platform based in Africa is usually not authorised by the FCA, and the FCA includes overseas agriculture among its examples of activities that are not regulated (opens in a new tab), where you may have no access to the compensation scheme or the ombudsman. Check any UK firm on the FCA’s Financial Services Register (opens in a new tab) before you deal with it.

How are returns from Africa taxed in the UK?

If you are resident in the UK, you normally pay UK tax on foreign income (opens in a new tab), including dividends and interest from abroad, and you may be able to claim relief if the same income is also taxed in the country where it was earned. Before 6 April 2025, people whose permanent home was abroad could sometimes avoid UK tax on foreign income; that rule has ended, although some people can claim a newer relief on foreign income and gains.

UK tax reliefs for investing in small companies rarely help here. To use the Enterprise Investment Scheme, for example, a company must have a permanent establishment in the UK (opens in a new tab), which most African businesses do not. Tax rules are complex and change often, so take advice from a qualified tax adviser before you invest.

Checks to make before you invest

Whatever route you choose, these checks reduce the risk of the losses ARK’s research describes.

Know exactly what you are buying. Shares, a loan, a share of revenue and a bond each give you different rights. Make sure the agreement says which, in writing.
Check who regulates it. Look up UK firms on the Financial Services Register (opens in a new tab). For a platform or fund based in Africa, check that it is licensed by the securities regulator in its own country.
Check the business. Confirm that it is registered, who owns it and that its accounts are up to date. Ask to see them.
Agree how you will hear about results. Regular written reports on how the money is used and what it has achieved should be a condition of any investment.
Ask what happens if things go wrong. Find out who is accountable, how disputes are settled and whether you can get your money back.
Take your time, and take advice. Be wary of pressure to decide quickly. The FCA suggests five questions to ask before you invest (opens in a new tab), and if you want advice, to use an adviser it regulates.

What ARK is doing for diaspora investors

ARK Group International is not currently offering investments. Its focus is on understanding the diaspora investment landscape and building the evidence for diaspora investment as its own asset class, one that can grow to scale. That work is for the whole sector, not only for ARK.

For diaspora investors themselves, ARK offers Diaspora Investment Essentials, a free course on FundBridge, ARK’s platform. Taking part also adds to the evidence ARK is gathering about how diaspora investors think and invest. ARK’s research on Ghana and Sierra Leone is free to read, and the page for diaspora investors explains ARK’s work in more detail.

This article is general information. It is not financial, tax or legal advice, and it is not an offer or an invitation to invest.

Frequently asked questions

Can people living in the UK invest in businesses in Africa?

Yes. UK residents can invest directly, through angel networks, through platforms and funds, or by buying bonds sold to the diaspora. Each route carries different risks and protections, and many investments in African businesses fall outside UK compensation schemes. This is general information, not advice.

Is investing in an African business protected in the UK?

Usually not. The Financial Services Compensation Scheme covers only firms authorised by the FCA or the Prudential Regulation Authority, pays up to £85,000 per person per firm if such a firm fails, and never pays out for poor investment performance. Businesses and platforms based in Africa are usually outside it.

Do UK residents pay tax on returns from investments in Africa?

Normally, yes. UK residents usually pay UK tax on foreign income, including dividends and interest from abroad, and may be able to claim relief if the income is also taxed where it was earned. Take advice from a qualified tax adviser.

How much of their money should people put into high-risk investments?

The FCA suggests keeping high-risk investments to no more than 10% of your total net assets, and investing only money you can afford to lose. Investments in growing private businesses usually count as high risk.

What is a diaspora bond?

A diaspora bond is a bond a government sells to its citizens and descendants living abroad, usually to pay for development projects. Ethiopia, Nigeria, Kenya and Ghana have run diaspora bond programmes, with varying success. The money is lent to the government, not directly to businesses.

Can members of the diaspora support African businesses without investing money?

Yes. ARK’s research in Ghana and Sierra Leone found diaspora professionals giving expertise, mentoring and help with investment readiness and funding proposals. Introductions to customers, suppliers and investors abroad can be as valuable to a growing business as money.

How UK-based diaspora investors can back growing businesses in Africa