Impact investing refers to investing with the aim of achieving social or environmental returns in addition to financial returns. It is increasingly accepted as an innovative entrepreneurial and responsible method for addressing some of Africa's development challenges, such as food insecurity, youth unemployment and lack of access to basic services, including energy, water, health and education. However, the volume of impact capital in Africa is still limited, and international development agencies, such as the United Nations Development Programme (UNDP), seek to mobilize this emerging sector.
The UNDP African Facility for Inclusive Markets (AFIM) commissioned ADALYA to conduct research and prepare a report analyzing the ecosystem of impact investing in Africa.
The project included conducting both in-depth research of existing data and original surveys developed by us. We also held a series of interviews with 45 key stakeholders in the field of African impact investing, including leading investment managers, entrepreneurs and organizations involved in advancing the market and encouraging activities.
The resulting "Impact Investing in Africa: Trends, Constraints and Opportunities" report analyzes the various actors currently active in the sector, while reviewing the status of supply and demand for impact capital and existing challenges for the sector's growth.
It also suggests concrete actions policy makers, investors and enabling organizations can take to promote the development of the impact investing sector in Africa:
- Catalyze: methods to increase the volume and effectiveness of impact capital in the continent;
- Collaborate: incentives and action that can promote collaboration and information- sharing among the existing actors in the impact investing sector in Africa;
- Enable: actions and financing solutions that can directly support the operations of actors in the sector, such as platforms for financing early-stage impact entrepreneurs and others.
ADALYA is confident that implementation of these specific recommendations, which combine solutions from the public sector, public sector and civil society, will help catalyze the impact investing sector in Africa.