West African impact investing totalled $6.8bn in last decade


The impact investing industry in West Africa is comparatively small, but growing, totalling US$6.8 billion over the past decade, according to research by the Global Impact Investing Network (GIIN).

According to a new report released by GIIN in partnership with Dalberg and the UK government today, the available data for figures released shows impact investing in the West African region came to US$6.8 billion between 2005 and mid-2015; with 45 impact investors active in the region.

However, West African activity is small compared to other regions.  East Africa, for example, received a total of US$9.3 billion in impact investment over the same period, despite the region’s gross domestic product (GDP) being less than half of West Africa’s.

Of the 45 impact investors identified in West Africa, 14 are development finance institutions (DFIs), and a further 31 are non-DFI or other investors.

The study finds DFIs are responsible for 97 per cent of the total impact investing capital in West Africa. In the decade in question, DFI investment increased at a compound annual growth rate of 18 per cent, from US$190 million in 2015, to US$852 million in 2014.

Within the region, Nigeria and Ghana together attract more than half – 54 per cent – of all impact capital.  

Nigeria received the largest amount of impact capital, at 29 per cent; while Ghana received almost the same amount at 25 per cent. The similarly high figures are noteworthy particularly in the light of the fact that while Nigeria accounts for 80 per cent of the region’s GDP, Ghana accounts for only 5 per cent. According to GIIN, the comparatively high levels of impact capital going to Ghana reflects its “business-friendly policies”.

Senegal and Ivory Coast together account for a further 21 per cent of impact capital deployed in the region.

Looking to the future, impact investors interviewed for the study said geographically, Nigeria is and will continue to be the primary market of interest, while Senegal and Ivory Coast are also gaining attention, attributed to the high levels of political stability and strong growth, respectively.

The opportunities in Ghana split investor opinion, with some perceiving opportunities in Ghana, while others expressed some skepticism regarding its prospects due to current economic volatility.

As to the sectors attracting the most impact capital, the report finds the energy, manufacturing, infrastructure, and financial services sectors are in the lead.

On the other hand, the main future opportunities perceived by impact investors lie in the energy, fintech and agriculture markets.

Looking to the investment instruments used in the region, the report says both DFI and non-DFI investors invest most of their capital through debt; with 84 per cent of DFI capital and 60 per cent of non-DFI capital deployed through debt.

While DFIs make even use of equity and guarantees – with 6 per cent and 7 per cent of capital deployed, respectively-  and use quasi-equity least – accounting for only 3 per cent of capital deployed-, non-DFIs make significantly greater use of both equity and quasi-equity, with 23 per cent and 13 per cent of capital deployed, respectively.

From the demand side GIIN found a substantial need for financing which is not being met, particularly for small social enterprise, as well as among small and medium-sized enterprises (SMEs).

The report concludes that while the ecosystem is developing, it is still not active enough to service demand, and that much more needs to be done to grow the space further.  One route to achieving this growth, the report says, is to focus on building up more incubators.

“The ecosystem of enterprise and investor support organizations is growing, but remains underdeveloped. While strong growth and investment in ecosystem actors such as incubators, accelerators, associations, and technical assistance providers is evident over recent years, the ecosystem is not at sufficient scale to service the needs of the region, and is hampered by a lack of awareness among both investors and enterprises of the value of ecosystem support,” GIIN said.

“Investors cite underdeveloped enterprise business systems as a large barrier to deploying capital, so increasing the number of incubators, in particular, will be crucial to supporting the growth of the impact investing industry.”



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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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