Impact investments are investments made in companies, organizations and funds with the intention of generating measurable social andenvironmental impact in addition to financial return. Impact investing occurs across asset classes and financial products, including private equity and venture capital as well as debt.
The impact investing sector in Africa is growing, with the flow of new capital from international investors, local public institutions, and commercial investors. These increased sources of capital offer existing African impact investors access to new opportunities for partnership, coordination, networks, and scaling up operations.
Across Africa, a powerful investment trend is gaining momentum — impact investing. This approach goes beyond just profits, focusing on investments that generate positive social or environmental impact alongside financial returns.
Investing in impact businesses can increase access to basic services such as finance, healthcare, education, clean water, and energy. Several prominent examples in Africa demonstrate that impact businesses can be both profitable and beneficial for a wide range of stakeholders. with tangible social and economic benefits.
The total development financing gap in Africa is estimated at least at US$100 billion annually until 2030. To date, approximately US $8 billion has been invested in African impact investment. The investment ecosystem in the Africa impact investing sector includes 5 main actors: early-stage impact funds, private equity funds, development finance institutions, foundations, and institutional investors.
African governments are increasingly recognizing the potential of impact investment business to contribute to sustainable growth. Local business schools, acceleration hubs, and think tanks are beginning to adopt these new concepts, while research into and development of new solutions is increasingly taking place within local institutions.
Why is Impact Investing Thriving in Africa?
- Untapped Potential: Africa boasts a rapidly growing population, the world’s youngest, with a projected workforce of over 1.2 billion by 2050. Impact investors see an opportunity to address social and environmental challenges while building sustainable growth in this dynamic market.
- Double Bottom Line: Today’s investors increasingly seek a “double bottom line” — achieving financial returns alongside measurable social or environmental benefits. Africa presents a compelling landscape for both. A 2020 survey by the Global Impact Investing Network found that nearly half of respondents planned to increase their allocations to Africa.
- Alignment with Sustainable Development Goals (SDGs): Many African nations are prioritizing progress towards the UN SDGs, which focus on areas like poverty reduction, quality education, and clean water and sanitation. Impact investing aligns perfectly with these goals, creating a win-win situation for investors and communities.
How BGR Consulting Can Help Your Business Attract Impact Investors:
- Developing Sustainable Business Models: We’ll work with you to design or refine your business model, ensuring it creates positive social or environmental impact alongside financial viability.
- Impact Measurement & Reporting: We’ll help you establish a framework to measure and report the social and environmental impact of your business, demonstrating your commitment to positive change.
- Connecting with Impact Investors: Our extensive network connects you with impact investors seeking businesses that align with their values and investment goals.
By partnering with BGR Consulting, you can unlock the power of impact investing. Together, we can create a future where African businesses thrive while making a positive and lasting contribution to the continent.
This is just the beginning! Impact investing in Africa is a rapidly evolving field. Stay tuned for future posts where we’ll explore further into specific examples and success stories.
Let’s Connect:
Stay connected with us for more updates:
Website || Email || IG ||Linkedln || Twitter || Whatsapp Us
