The scorecard of Nigeria and mnay other countries in poverty reduction and economic growth has not been very impressive. This has led to investment in social entrepreneurship,  DANIEL ESSIET reports.

Over the past 10 years, the records of many developing countries, including Nigeria in economic growth and poverty reduction, have not been impressive. Analysts say business and policy initiatives to improve dire jobs situation and economic inequality have indeed been slow to show progress.

This is because their efforts have been undermined by insecure employment, lack of basic necessities and poor access to education which make it impossible for many people  to develop their potential.

This has led to increasing support for social entrepreneurship as a promising means of addressing these issues. Across Nigeria and the rest of Africa, there are social enterprises creating jobs and addressing problems in structurally underdeveloped areas.There are businesses transforming the lives of millions of people and, in turn, their communities.

Local entrepreneurs are taking the lead in upskilling the nation’s low-wage, informal and otherwise vulnerable workforce. However, the efforts have yielded marginal impacts. To this end, demand for sustainable impact investments has grown exponentially.

Speaking during the public presentation of Impact investing and Policy Landscape Analysis: Nigeria and Ghana, by Impact Investors Foundation (IIF), in Lagos, the Regional Director, West Africa, Ford Foundation, Mr. Innocent Chukwuma, said  Nigeria and the rest of the world will need between $4 and $6 trillion to achieve Sustainable Development Goals (SDGs). He said there is an estimated $2.5 trillion yearly gap in financing the world’s SDGs.

Chukwuma said Nigeria and many middle income countries are struggling to achieve the SDGs due to insufficient budgetary support and allocation to social and economic challenges.

According to him, achieving the SDGs requires a greater commitment across sectors and industries in leveraging private capital to undertake activities that will promote social and environmental results. In line with this, he said the Ford Foundation has committed up to $1 billion from its $12 billion endowment over the next 10 years to impact investing.

He said governments and charity alone cannot meet the challenges of poverty and environmental degradation, adding that impact investors can play an important role by financially supporting entrepreneurs who are building lasting, market-based solutions.

The Projects Lead, Impact Investors Foundation (IIF), Maria Glover, said Nigeria has a thriving impact investing ecosystem, which is expected  to continue to grow and develop.

She noted, however, that despite  the increased awareness of impact investing, information on the impact investing sector remains limited.

She said the IIF report was written to address the gap and to propose policy recommendations, add-ing that Nigeria and Ghana have been identified as fast growing impact investing market.

Both countries, according to her, offered dynamic business environments with increasing entrepreneurial and investment activity focused on ensuring inclusive and sustainable economic development.

She stressed the need to bridge the gap between entrepreneurs and impact investors to accelerate the end of extreme poverty.

Presenting the report, a member of Dalberg Editorial Team, Astou Dia said: “The Landscape for Impact Investing in West Africa seeks to understand the extent to which investor experience, deal flow, and outlook have evolved since 2015 and policy has enabled or inhibited impact investing, and, in turn, to propose policy recommendations that address the issues identified.”

She said despite the macroeconomic challenges in Nigeria and Ghana, the sector has seen healthy growth with $5.9 billion in impact capital deployed since 2015.

She said Nigeria has experienced greater growth in deal flow compared to Ghana with the Nigerian market now 3.9 times the size of Ghana’s ($4.7 billion) in transactions.

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She said direct foreign investments (DFIs) continue to dominate the space, representing 97 per cent of the market and an average transaction size of $56.9 million, while non-DFI transaction sizes increased moderately from $2.2 million to $2.6 million.

On challenges, she said a majority of the investors complained of the scarcity of investment-ready businesses. Another challenge is inadequate policy and regulatory environment. She said the  impact investment ecosystem is desirous of stable and enabling regulatory policy environment.

Others were poor data availability hindering ability to make investment decisions and   infrastructure to support the growth opportunities for portfolio companies.

The Senior Lecturer, Entrepreneurship, Lagos Business School, Dr Henrietta Onwuegbuzie said leveraging private capital through impact investment can play a critical role in supporting the achievement of the SDGs.

She said Nigeria needs businesses -focused on providing market-driven solutions that address a social, economic or environmental problems.

IIF Chairman Afolabi Oladele said the foundation hopes to become a focal point for investors in the sector.

He said the foundation’s collaboration include sharing its experiences in impact investing with other organisations.

The Chief Executive, Kuramo Capital Management, Wale Adeosun, said there is a growing recognition and need for impact investing.

He said his firm has been working within other investors to align investments with global development goals, adding that a lot of impact investments have been channeled into projects that have been a catalyst for poverty alleviation and economic and social prosperity in Nigeria.

He said Nigeria’s vast development needs provide ample opportunity for impact investments, which aim not only to generate a financial return for investors but also to have a positive social and environmental effect.

As private sector investors look to emerging markets as the next frontier, the Chief Executive, Allon, Dr Wiebe Boer said there were substantial investment opportunities across the energy sector that remain largely untapped.