$22.5b impact investment in Southern Africa over 20 years

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A total of US$22.53 billion in impact investing capital was invested across the Southern African region over the 20 years to 2015, with South Africa proving the most active market, according to new research by the Global Impact Investing Network (GIIN).

The GIIN’s newly released report, The Landscape for Impact Investing in Southern Africa, finds that US$22.53 billion was deployed by impact investors across 12 countries in the Southern African region between 1996 and mid-2015.

Of this total, South Africa was the recipient of 65 per cent of funds – amounting to US$14.7 billion.  In second and third places were Zambia and Mozambique, receiving approximately 10 per cent and eight per cent of funds respectively.

International development finance institutions (DFIs) were responsible for deploying 75 per cent of impact capital in the region, to the value of US$16.8 billion through over 650 deals, the research finds.

Of this figure, US$13 billion was disbursed after 2005, as such the researchers conclude activity in the impact investing market has accelerated over the past decade particularly.

According to the data, South Africa-based DFIs were more active than international DFIs – deploying US$17.1 billion regionally through over 7,500 deals. South African DFIs tend towards their own market, however, with US$14.4 billion of capital disbursed by this group going to South African companies through 6,800 deals.

The GIIN said all investments by South African DFIs took place between 2002 and 2014, with the majority of activity occurring before 2009.

Other types of impact investors are also active in the region, including venture capital (VC) and private equity (PE) funds, foundations, commercial banks, and pension funds.  Combined these non-DFI sources deployed nearly US$5.7 billion in the region through more than 500 deals.

The GIIN said the report is aimed at supporting investors already active in Southern Africa, as well as new entrants looking to deploy impact capital.

“Given the growing interest in this important region, we hope that this in-depth market research will serve investors already active in Southern Africa, as well as those looking to deploy impact capital in these diverse countries,” said Amit Bouri, chief executive officer (CEO) of the GIIN.

“Impact investors are continuing to support these sometimes challenging but critical markets, working to demonstrate that investment in the region can drive meaningful social and environmental impact alongside financial returns.”

The GIIN has previously produced similar reports for impact investing in other regions, most recently, a report covering West Africa, which found the impact investing industry in West Africa is comparatively small, but growing, totalling US$6.8 billion over the past decade.

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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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