Impact Investing making headway in Africa, says Jean-Claude Bastos de Morais
The United Nations has set Sustainable Development Goals (SDG’s) for developing countries – the majority in Africa – to reach by 2030. These countries need to increase their annual public and private budget by $1.3 trillion. Jean-Claude Bastos de Morais, a Swiss-Angolan entrepreneur explains, “The finances raised until now are not sufficient, and not all countries have enough resources to measure progress on the ground.”
This enormous figure represents a great challenge, particularly for African policymakers. The question that arises now is, how will Africa manage funds to achieve sustainable economic growth? Also, how can African policymakers capitalize on impact investment mechanisms to utilize private finance?
The African Union’s ‘Agenda 2063’ envisages an integrated, flourishing and peaceful Africa, driven by its people. However, there is a considerable disproportion between east and west. According to a report by the Global Impact Investing Network (GIIN), from 2005 to 2010, West African countries witnessed $6.8 billion in impact investment against East Africa’s $9.3 billion. There are a number of reasons why this is so, majorly infrastructural challenges.
Private investors usually seek two important factors: good infrastructure, and a stable political & economic scenario. Kenya, the East African country, continues to transcend West African nations in terms of infrastructural development – mainly banking instructions and physical logistics like airports and flight connectivity. However, experts see this as one of the greatest opportunities for West African countries since the developmental aspect of West African investment provides investors with long-standing, high value opportunities.
Researchers suggest that investments contributing to an expanded high-value supply chain, thereby generating jobs are sought by the investors because they offer continuing, sustainable financial returns.
The national governments in West Africa must provide tax incentives to promote diversified impact investment in major sectors. Bastos de Morais further explains, “Innovators function well when they work under a creative ecosystem, where they find solutions for the prevailing challenges.”
To achieve this objective, the authoritative bodies need to implement cross-departmental initiatives and policies that integrate with the economic policy and expenditure; along with the hands-on investor relations programs that court private capital.
“Being an entrepreneur, I am not looking for charity. I want to work with commercial investors who are keen on achieving their social impact objectives,” says Jean-Claude Bastos de Morais.
African investors can find a mature and investment-ready environment in countries like Angola and Ghana to ensure that their funds deliver sustainable financial and social impact returns.