Nigerian South African Chamber of Commerce

Members Directory



IMPACT INVESTING: THE PURSUIT OF PURPOSE AND PROFITS

Posted on: 01 May 2011

Impact Investing is an investment strategy whereby an investor proactively seeks to place capital in business that will have intentional social and /or environmental goal in a bid to change and better the lots of the people as well as generate financial returns.

The need for investment in social, economic and environmental sectors that have direct impact on the life of people in Africa continues to grow daily, the Principal Partner of Alitheia Capital, Mrs. Tokunboh Ishmael , has asserted  that the potential for impact investing is expected to exceed $500billion over the next decade.

While speaking at the March Breakfast forum of Nigerian-South African Chamber of Commerce on the topic: Impact investing: The Pursuit of Purpose and Profits.

She said that African Corporations like Nedbanks of South Africa have commenced investing in the areas that affects people’s lives directly.

“If leaders build industry, investing for impact could have a powerful role in addressing some of our most troubling social, environmental and infrastructural challenges. The promotion of impact investing across Africa will foster the development of the continent and bring meaningful improvement in the living standard of the people” Ishmael said.

She called on all local investors to brace up for the challenge because major investments seen in this area in Nigeria came mainly from foreign investors.

Ishmael was worried over the low level of financial inclusion in the country; stressing that huge amount of resources have been lost due to lack of access to financial services by about 60 percent of the population of Nigerians.

Some local investors that who according to her have started to look towards these directions have set up foundations that are poised to promoting impact investment across Africa as part of its mission to avoid the socio-economic development of the continent.

She added that there was a great opportunity for Nigerian Philanthropists to infuse impact investing in their programmes as a way to enhance sustainability.

Recent reports showed that over the next 10 years, investors across the world will not just pre-occupied with financial returns but will also lay emphasis on the social, environmental and development impacts of their activities.

This will see impact investment as this trend is known, rake in up to $667 billion in profits over the period and achieve the billing of the newest emerging asset class of the next decade, based on the reports prepared by JP Morgan and Rockefeller Foundation.

It showed that market opportunity for investment is vast, including the poor population who earn less that $3,000a year. In this category of the population, the potential for invested capital is estimated at between $ 400billion and 1 trillion over the 10 years realizing profits of between $183 billion and $667 billion.

These estimates are based on the analysis conducted on selected businesses such as housing, rural water delivery, maternal health, primary education and financial services sectors for this portion of the global population.

Impact investing will reveal itself to be one of the most powerful changes within the asset management industry in the years to come the report stated.

Nicholas Coleman, the Economic Counsellor of South African High Commission commended Mrs. Tokunboh Ishmael for her informative and well researched presentation.