Impact investment is poised to play a pivotal role in complementing public spending and Official Development Assistance (ODA), reducing vulnerability to external economic shocks, and addressing pressing socio-economic needs in African economies.
A recent report by The Rockefeller Foundation and JP Morgan suggests that impact investments could grow into a $500 billion global market within the next decade. These investments are crucial for tackling major social and environmental challenges in regions like West Africa, where government resources and development aid are often insufficient to meet the demands of development.
“The implications for West Africa are exciting. Now is the time to deepen our understanding, increase awareness, and foster dialogue on impact investing in the region,” emphasised The Rockefeller Foundation in a recent report.
These discussions provided the backdrop for a panel discussion at the 6th convening on impact investing, themed “Catalytic Capital for Inclusive Growth and Development,” held in Lagos.
Wale Okunrinboye, Chief Investment Officer at Access Pensions, highlighted some of the challenges surrounding impact investment. He pointed out the need for transparency in fund manager track records, adding that, “Governance is also critical, as investors need to be able to hold fund managers accountable and engage in regular sessions to ease collaborations and resolve any conflict amicably”
Mezuo Nwuneli, Co-Founder and Managing Partner at Sahel Capital, stressed the importance of data-sharing and relationships in impact investing. “Those with deeper relationships can secure better deals and collaborations. However, sharing data becomes challenging when dealing with potential competitors,” he noted.
Akinropo Omoware, Head of Component at Sustainable and Inclusive Economic Development for Decent Employment in Nigeria (SEDIN) Programme, highlighted the role of the government in creating incentives and parameters for impact investment. He laid emphasis on the need for clear messages and measurement parameters to assess the impact of incentives.
“How do we create returns or at least make returns while we’re trying to drive impact? I think the role of government is very critical; they must be able to set the parameters along with the industrial players and what will be the trade-off in terms of how to attract people, he said.