Impact Investing in Africa

According to The Global Impact Investing Network (GIIN), impact investment can be defined as investment made into companies, organisations, and funds with the intention to generate social and environmental impact alongside a financial return. Hence, impact investing in Africa is the deployment of investment in African companies, organisations, and funds with intentions to generate social, health, and environmental impact alongside a financial return. It is important to note that categorical impact investing in Africa is significantly different from charitable aids given to Africa as the latter does not usually drive investment / financial rewards for the charity giver. Impact investment in Africa attracts a broad range of investors, primarily fund managers, development finance institutions, institutional investors, and foundations. There is a broad range of asset classes which includes: equity, commodity, fixed income, foreign exchange, property, and derivates. Actual numerical quantification and data on the market size of impact investing in Africa remains very limited.

The Sustainable Development Goals (SDGs) framework developed by United Nations serves as a driving force and framework for impact investing in Africa. An Annual Impact Investor Survey report by The GIIN showed that more than half of impact investors are tracking some or all of their performance against SDGs. Furthermore, there is strong appetite for impact investors to catalyse impact investing towards SDGs. However, the United Nations continues to argue the case for more capital and investment deployment to drive and grow impact investing in Africa and on a global scale. The UN estimates that USD 5-7 trillion is needed annually to achieve the goals.

Impact investing has been hailed as a transformational and revolutionary investment methodology for revitalising and growing African economies. However, the vision is increasingly distant from the reality. According to a UNDP study “Impact Investment in Africa: Trends, Constraints and Opportunities”, the 9 key challenges facing impact investment in Africa are:

1. General lack of awareness and understanding of impact investment;
2. Difficulty in sourcing viable investments that meet both financial and social/environmental objectives in Africa;
3. Limited availability of innovative fund and deal structures;
4. Difficulty exiting investments;
5. Poor visibility and inadequate recognition of social enterprise status;
6. Lack of capital supply across the risk/return spectrum;
7. Inadequate policy and regulatory environment;
8. Poor linkages between social enterprise, investors, and innovation networks; and
9. Poor and inconsistent impact measurement practice.

In order to address the highlighted challenges facing impact investment in Africa, the Impact Investment Action Plan was developed as shown in Figure 1. The primary aim of the Impact Investment in Africa Action Plan is to support the development of a vibrant impact investment sector on the African continent. The overarching vision is the development of a vibrant impact investment sector in Africa. The stated vision is further supported with five key intermediate outcomes and a supporting pan-African action plan and action network as in Figure 2.

One of the leading UK impact investment firms with an African focus is Uhusiano Capital Ltd. Uhusiano Capital is a boutique, regulated, financial advisory firm based in London with a specialist team primarily focused on impact investment in Africa. Uhusiano Capital addresses the capital needs for African-based projects and opportunities. The firm is driven by a strong founding principle grounded in the fundamental belief that commercial capital and impact/social capital can come together to generate sustainable long-term projects/funds/products in Africa. Founded in 2016 and incorporated in 2017 by Christelle Kupa, Uhusiano Capital has grown to establish its expertise in three key domains: capital raising, deal flow origination and strategic marketing.

Uhusiano Capital’s capital raising team offers an innovative approach to raising capital for exceptional projects and/or companies by utilising its deep and well-entrenched experience in the impact investment community in African markets. By utilising its innovative capital raising approach, Uhusiano Capital is able to bridge the gap between impact investors and impact opportunities in a unique and transformational way.

Uhusiano Capital’s capital deal flow origination team are world leaders in harnessing the vast global network to support impact investors, whether new or well-experienced, to clearly and objectively identify the most talented and undiscovered mangers and projects in order to achieve their investment objectives: financial and social/impact gains.

Navigating the African impact investment ecosystem is challenging, difficult, and sometimes almost impossible. Uhusiano Capital’s strategic marketing team over the years have developed revolutionary strategic marketing solutions and impact investment advisory teams and services to make navigating and marketing impact investments in Africa simple, effective, and rewarding. Furthermore. Uhusiano Capital’s strategic marketing team provides strategic recommendations and deep insights for making meaningful marketing of impact investments in Africa.

In conclusion, Impact Investment in Africa has a gigantic potential to revitalise, recapitalise and rejuvenate African economies, African projects, African businesses and most importantly, African people. However, fundamental understanding of the conceptual imperatives of Impact Investing in African and the practicality and nuisances of impact investing in Africa is central and at the heart of whether or not impact investment will deliver on its lofty potentials in Africa. A strong belief in innovative and philosophical driven firms with Africa-focused impact investment and Africa expertise like Uhusiano Capital plays a significant role in translating impact investment concepts into financial returns and social/environmental impacts in African economies.