IMPACT INVESTING POTENTIAL TO EXCEED $500BN
As 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 revealed that the Potential for impact investing is expected to exceed $500 billion over the next decade.
Speaking at the March Breakfast Forum of the Nigerian-South African Chamber of Commerce on the topic: 'Impact Investing: The Pursuit of Purpose and Profits', Ishmael said some African corporations like NedBank of South Africa, have started investing in areas that touches people's lives directly.
'If leaders build the industry, investing for impact could have a powerful role in addressing some of our most troubling social and environmental 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,' she said.
Ishmael called on local investors to brace up for the challenge because major investments seen in this area in Nigeria came mainly from foreign investors. She decried 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 Nigeria.
Some local investors who according to her are beginning to look towards this direction have set up foundations like the Foundation, committed to promoting impact investing across Africa as part of its mission to aid the socio-economic advancement of the continent. She added that there was a great opportunity for Nigerian philanthropists to include impact investing in their toolkit as a way to enhance sustainability.
Recently various reports reveal that over the next 10 years, investors across the world will not just be preoccupied with financial returns, but will also pay closer attention to 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, according to a report prepared by JP Morgan and Rockefeller Foundation.It indicates that market opportunity for investment is vast, including among the poor population, who earn less than $3,000 a year.
In this category of the population, the potential for invested capital is estimated at between $400 billion and $1 trillion over the next 10 years, realising profits of between $183 billion and $667 billion. These estimates are based on analyses conducted on selected businesses in the 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 states.