07.02.2021

Category: Impact investing africa

Impact investing africa

The past five years have witnessed the substantial growth and diversification of the impact investing industry in Africa. International research has consistently identified Africa as a favourite destination for capital seeking social or environmental impact. However, this growth has been uneven and slow in terms of gaining both real scale and sustainability. The largest funds still tend to be owned and controlled by American and European investors.

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The Northern development finance institutions have generally avoided high risk investments and have been inconsistent in measuring their additionality. Further, as elsewhere in the world, impact assessment practices in Africa are overly reliant on tracking outputs and documenting stories, placing relatively less emphasis on outcomes and impacts per se.

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Moreover, there are significant differences across the various regions in the amount and type of capital being deployed, the nature and sophistication of the market, and the types of social needs for the populations that live and work in each. While East Africa continues to dominate impact investing activity, Southern Africa has also been a site of major activity, with West Africa showing strong potential and promise.

The nature of impact investing in each region varies significantly in terms of the engagement of international institutions and local actors, that is, private equity investors, financial institutions, funds and development finance institutions. As such, impact investing operates in Africa at the intersection of traditional development assistance bilateral and multilateralnew forms of development finance, and state-led financing for social and environmental programs.

One initiative that has crystalized both the obstacles and opportunities facing the industry has been co-led by the African Union and UNDP, which together issued the Cape Town Declaration on Impact Investment in Africa.

impact investing africa

Finally, in general, the launch of the Global Goals or Sustainable Development Goals may point the way to scaling up blended public, private and philanthropic financing in Africa through structured, pooled funds focused on SDG goals and targets, especially hard-asset opportunities involving renewable energy and water and sanitation infrastructure, and affordable housing. Source: Mokoena There is debate in some quarters in Africa as to what exactly constitutes an impact investment in this part of the world.

Some investors take the view that, in a broad context of widespread poverty and unemployment, virtually any investment constitutes an impact investment. On the other side of the argument, other investors seek assurance that their investees target and generate benefits specifically for the poor and vulnerable within African communities. The purpose of the present exercise is to examine the different perspectives and positions in this debate.

Form small groups. Choose a chair and a rapporteur for each group. Record your answers on flip charts or slides. Your rapporteur will have five minutes to present your responses in a facilitated plenary session.

Bouri, A. Giamporcaro, S. Global Impact Investing Network and Dalberg. Hamdok, A. Harji, K. Melesse, M. Mokoena, R. Smith, L. Thornley, B. United Nations Development Program. Module 2 — Impact Investing in Africa. Topic The past five years have witnessed the substantial growth and diversification of the impact investing industry in Africa.Our Credentials.

Please click here for the latest detail on which courses are affected. Impact Investing in Africa is a specialised short course, offered by the Bertha Centre for Social Innovation and Entrepreneurship at the UCT GSB, designed to equip wealth managers, consultants, funders and other financial intermediaries with expertise in this rapidly growing field.

Impact capital africa

This interactive five-day course gives participants the tools to develop impact investing strategies, analyse opportunities and engage with clients about socially responsible investments. Most major financial institutions are involved in the impact investing market by building in-house expertise. However, many wealth managers, consultants and funders have yet to build their own expertise to meet the demand from a new generation of wealth holders. The Impact Investing in Africa course at the UCT GSB uses case studies, taught by leading experts and practitioners from across the globe, to give delegates the practical financial tools and industry insight needed for this new field.

You will receive an email with our course brochure along with a link to apply to this course. This interactive five-day course offers a rich learning experience that blends theory and practice. Develop a sophisticated understanding of the impact investment ecosystem, globally and across the continent. Best practices for building a pipeline and performing due diligence with an impact lens across multiple sectors and asset classes. Day 3: Evaluating, structuring and managing direct investments and investments through intermediaries.

Impact Investing in Africa: A Case Study on East Africa

Create impact measurement and management strategies and understand the complexities of impact deal structuring. Before joining the Bertha Centre she worked for the Dutch development bank FMOwhere she designed, funded, and monitored projects with a high social, economic, and environmental impact.

She sat on the technical assistance advisory committee of two international impact investing funds focusing on micro and small business finance. Natasha has experience in consulting, collaborating with public, private, and donor-sector clients on a range of issues including fund and foundation design, job creation, and youth unemployment.

impact investing africa

Alumni Faculty School Leadership Work for us. Gain expertise in impact investing Position yourself in a rapidly growing field Impact Investing in Africa is a specialised short course, offered by the Bertha Centre for Social Innovation and Entrepreneurship at the UCT GSB, designed to equip wealth managers, consultants, funders and other financial intermediaries with expertise in this rapidly growing field.

Decided that this is the programme for you? Day 3: Evaluating, structuring and managing direct investments and investments through intermediaries Create impact measurement and management strategies and understand the complexities of impact deal structuring. Day 4: Building impact investing portfolios How to build your strategy and manage your impact portfolio.

Day 5: Innovative Financing and emerging technologies for impact Blockchain, Artificial Intelligence and Machine Learning Learn about what is next in the world of impact investing and technology. Students need to arrange their own accommodation. Impact Investing in Africa Name.

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impact investing africa

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Or, if you are already a subscriber Sign in. Close drawer menu Financial Times International Edition. Search the FT Search. World Show more World. US Show more US. Companies Show more Companies. Markets Show more Markets.The Impact Investing National Task Force is a cross sectoral initiative aimed at building the eco-system in order to accelerate the deployment of capital that optimises financial, social and environmental returns. Achieve socio-economic justice in South Africa by building an inclusive and sustainable economy.

Impact capital is supplied by a spectrum of investors and used by non-profit and for profit entities to create social and environmental impact. Click on applicable section to see person involved. Potential members were provided a formal introduction to the initiative and an overview of the local landscape.

Meeting Agenda. Meeting Presentation. Meeting Minutes. Members deliberated further on working group focus areas, timelines and administrative arrangements. Bertha Centre — www. Increase supply of capital. Grow pipeline of investable opportunities. Improve match between capital and investable opportunities. Create enabling environment to facilitate deployment. Watch this space! Project Partners.With impact investing on the rise globally, the market provides capital to address the most pressing challenges in sectors such as housing, education, sustainable agriculture, green technology, and healthcare.

As such, impact investing counters conventional views that social and environmental issues can only be addressed by philanthropic donations. Indeed, the world truly needs impact investments. Impact investing looks at impact, social and investment return. Here, you target an entire system when you look at the social return and convert it into an economic return, education, create jobs, improve health, and take the burden off the government. This kind of investment can save the government more money so that can in turn, be invested into developing other critical infrastructure in the continent.

Additionally, of this number, 22 percent of global impact enterprises are located in Sub-Saharan Africa, and much of the opportunity lies throughout the continent. No matter where you are in the world, chances are that impact investing is happening all around you. The possibilities are endless. It is not a practice solely for personal gain but rather for the greater good.

Marina Leytes is an Impact Consultant. As outlined by Marina, there are at least seven steps that any individual who desires to pursue Impact Investing, should consider. Log In Register.

Remember Me. Lost your password? Impact investing is on the rise, what do you know about it? Roberta Annan.If countries included in this report were to increase their social mobility index score by 10 points, this would result in an additional GDP growth of 4. For governments and investors, then, projects that positively impact social mobility factors such as working conditions or population health to name only two of the 10 factors rated in the WEF report should be prioritised to maximise and ensure the sustainability of return on investment.

South Africa currently ranks 77th out of 82 participating countries in the WEF Global Social Mobility Index Ranking, which demonstrates the wide gap between the wealthy and the poor.

In real terms, this indicates that it is likely to take nine generations for the poorest South Africans to reach median income, compared to just two generations in top-ranking Denmark. Considering rising unemployment rates and extremely low GDP growth predictions - and prevailing challenges faced in the country that extend beyond but are not unaffected by the current COVID pandemic and the containment measures that have been instituted - this creates a sense of urgency to effect change.

Impact Investing is one way to approach this need, and sustainably. Broadly, a project can be called an Impact Investment if it creates an environmental or social benefit, as well as a financial return. The challenge, however, is that the criteria for what qualifies as an Impact Investment is not well defined beyond those simple terms in many parts of the world, and South Africa is no exception.

Take, for example, an investment made in equipment to improve the air quality of emissions from an existing factory. This investment could certainly show a positive environmental benefit and should show a financial return. It may, therefore, be classified as an Impact Investment. And the financial return may well be due to reduced operating cost and avoiding a hefty fine for non-compliance.

Projects that are effectively about applying run-of-the-mill technology to making a brown project greener, rather than providing innovative and future-focussed thinking to make a genuine social or environmental impact, are by no means inherently bad - but it is critical to remember that the financial pot to be invested is finite, and Impact Investors are entitled to know exactly how their funds are being used.

There must be funding available to both improvement and innovation projects, as both are beneficial to the environment and society, with clear distinctions made to inform potential investors. However, because these are not mandatory, they also are not standardised, making it difficult for investors to compare apples with apples.

Legislating financial and environmental impact reporting would make it easier to define whether or not an investment is an Impact Investment, simply because impact would be measured in a standard way and reported annually. So, greening an existing facility might fairly qualify for support funds as a green initiative. But investing the same value in funding a revolutionary environmentally impactful project would qualify as an Impact Investment.

Those countries that lead on better defining the grey areas around what constitutes Impact Investment, will find many of their innovative projects that foster social mobility are financially supported - as environmentally and socially conscious investors choose to invest in that clarity.

$1 Billion Impact Investor Explains How She Makes Money While Making The World A Better Place

South Africa has an opportunity to be part of this, by providing investors with surety of how their money is changing the world. April 2 minutes. April minutes.As a result, so much has been done around the globe with impact investing, even in Africa—businesses have reshaped, rebranded and new business have birthed. The presence of impact investing in Africa is becoming more and more apparent as new grounds are broken and more opportunities unlocked: it has become impossible for the impact investing landscape not to be noticed nor its impact felt.

The case studies below tell how much impact is being made particularly in Africa.

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As a result, SMEs were able to engage over 5, additional smallholder farmers SHF per annum which led to the creation of an additional jobs per annum. Many smallholder farmers in the underdeveloped rural areas of East Africa also benefitted indirectly from this fund as a result of higher production and higher demand from these SMEs.

Through this credit facility, SMEs were able to increase direct and indirect employment, boost turnover and assets, improve working environment and also build a stronger relationship with their SHF partners while fostering sustainable development throughout the region. Another case study in Tanzania is the Council on Smallholder Agricultural Finance CSAF which is aimed at strengthening food security in Tanzania through financing and capacity building for agro-processing firms.

The council provided loans for Chamwino Super Sembe Supply Limited, a company which sources maize from smallholder farmers and processes fortified maize flour for domestic food consumption.

In Tanzania, maize is the staple food for the majority of her citizens—a critical crop for food security.

Impact investing is on the rise, what do you know about it?

About 8 per cent of most maize in Tanzania is produced by small-scale farmers on a subsistence scale and also as a cash crop.

Sadly, very little of the maize that is domestically grown is nutritionally fortified before it reaches the final consumers. To change this story, Chamwino Super Sembe Supply Limited fortifies its flour from milled maize with iron, zinc, folic acid, and other vitamins which is then supplied to wholesalers, retailers, hospitals, colleges and school as well as government agencies across the country. The company, which employed over 90 employees: 30 full-time staff and part-time employees annually purchases and processes about 5, metric tons of maize sourced from 1, smallholder farmers, majority 60 per cent of whom are women.

Through this fund, Chamwino was able to double its purchase and milling processes, into a new factory equipped with modern equipment and also expanded distribution of its fortified flour by adding six delivery trucks.

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Its impact investment traverses over the continent of Africa as it delivers affordable solar-powered solutions designed for two billion people in the developing world without access to reliable energy. The power solution company makes high quality, affordable solar lanterns that are distributed world-wide with over half a million units delivered each month. This product has optimised work efficiency among other things as it delivers light to millions of individuals and families.

impact investing africa

The products and services have empowered over million lives and interestingly they pay less for solar lighting compared to traditional kerosene lanterns.

In addition, the lighting allows for greater productivity and income generation as their customers can work beyond daylight hours. Another set of the major beneficiaries are the students, who with this product enjoy a better study environment even as their homes are safer and healthier without kerosene fumes. Put together, about 26 million students have benefitted from d. This is huge! It is also important to mention the significant reduction in carbon emissions CO 2 that this product was able to save the world as it offsets 23 million tons of CO 2.

The statistics above show that the social and environmental impacts of this company is churning a good profit even as it is empowering lives all over Africa the same time.

As a result of the progress report and success story, d. It is also backed by an impressive collection of venture funds and foundations—all expecting to turn a profit on their investments; as it must continue to meet rigorous standards of social and environmental performance, accountability and transparency.


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