The Landscape for Social Investments in Africa
The AVPA Landscape for Social Investments in Africa report maps the diverse field of social investment across East, West and Southern Africa. It focuses on providers of social capital, their investment strategies, and opportunities for collaboration. In each of these regions, hundreds of institutions are deploying capital to achieve ambitious social and environmental goals.
This inaugural AVPA study, The Landscape for Social Investments in Africa, maps the diverse field of social investment across East, West and Southern Africa. In each of these regions, hundreds of institutions are deploying capital to achieve ambitious social and environmental goals.
Social investors include foundations, corporates, family offices, high net worth individuals, sustainability-aligned fund managers, development finance institutions, bilateral and multilateral donors, governments, diaspora, and faith-based organisations.
This report maps these providers of social capital, their investment strategies, and opportunities for collaboration amongst the various investors. Much more innovation and collaboration amongst social investors is needed if African countries are to close the enormous Sustainable Development Goals (SDG) financing gap.
The study was commissioned by AVPA with support from the United States African Development Foundation (USADF), Social Capital Foundation, The Rockefeller Foundation, and an anonymous donor.
Key recommendations from the study include
- Promote catalytic capital and blended finance to channel funding into underresourced SDGs, sectors and geographies
- Strengthen collaboration between social investors and government in key sectors
- Introduce innovative finance training programs for philanthropists, foundations and impact investors
- Establish philanthropy advisors to enable the focused mobilisation and deployment of philanthropy funds and promote engagement with impact investors
- Establish Techical Assistance (TA) toolkits, training programs and alternative funding models for nonprofits
- Improve the legal and regulatory frameworks; develop Start-up Acts; CSI policies, tax incentives
- Build investible pipeline of locally founded businesses, moving beyond early-stage support
- Invest in data building and knowledge tools to drive collaboration and awareness across the continuum of capital
- Lower the cost of due diligence and matchmaking
- Develop a blueprint to harness diaspora funds and local sources of capital such as faith-based institutions and individual philanthropists, SACCOs, MFIs, and informal investor clubs
AVPA plans to repeat the Landscape Study every 2-3 years, and pursue in-depth research in key social investment areas:
- Sectoral performance of blended and catalytic financing structures
- Blended and innovative finance for smaller transactions
- Benchmarking analysis of corporate social investment policies to provide best practices to guide policy formulation
- Effective ways to engage the diaspora to raise and structure development finance at scale
- Identify strategic collaboration mechanisms by which social investors can engage with faith-based giving
- Frequent data gathering e.g. through annual surveys to generate quantitative data for foundations and corporate social investors headquartered in the region
- Understanding the effectiveness of different Technical Assistance (TA) models adopted by investors across sectors
- Case studies of successful models adopted by grant-makers transitioning into impact investing and venture philanthropy
- Demand-side research - engage with social enterprises and NGOs to understand their changing needs further.