As Sub-Saharan Africa continues to play a significant role in promoting innovation and entrepreneurship, the region holds significant potential to attract impact capital aimed at sustainable development. Social impact entrepreneurs can tap into the growing supply of impact investments on the continent. According to the Global Impact Investment Network (GIIN), about 56% of investors surveyed indicated interest in increasing their impact assets in sub-Saharan Africa.
Development experts at a webinar titled, Scaling with Impact: Designing Business Models to Attract Investments, highlighted the need for entrepreneurs to align their business models to meet the impact ambitions of investors. The webinar was organised by development consulting firm, Sawubona Advisory Services.
In his address, the Co-Founder and Consulting Team Lead at Sawubona Advisory Services, Obinna Igwebuike, noted that the webinar was in line with the mission of the company, which is to stimulate private sector initiatives that support the achievement of the Sustainable Development Goals (SDGs). “There is a need to support private sector initiatives with the capacity to attract funding and effectively deploy the funds raised to bridge Africa’s development gaps. This webinar aims to achieve just that,” he stated.
Keynote speaker at the webinar, Peju Adebajo, Non-Executive Director & CEO, in tracing the factors that have mainstreamed social impact investments on the African continent, noted that wicked problems in Africa like poor energy access, high rate of (especially youth) unemployment, and poor state of healthcare, have led to an increased focus on Africa by impact investors, to deploy private sector initiatives to solve these wicked problems.
She advised entrepreneurs that the alignment of the business model with the social impact ambitions of investors starts with the purpose of the business. “A starting point in this business model alignment is the alignment of the purpose of the business with the SDGs or any other global development agenda. The team also has to be skilled, with a personal conviction to improve outcomes in the area of focus. The business also has to build capabilities in tracking and measuring social impact, which almost necessarily needs to be delivered at scale.”
The webinar had a case study presentation from Fadekunayo Adeniyi, Consultant at the Africa Adaptation Acceleration Program (AAAP), a programme of the African Development Bank (AfDB). The AAAP spearheads efforts to mobilise capital for climate adaptation across the continent. One of the standout initiatives under this program is the Youth Adapt Program, which focuses on harnessing the potential of youth-led enterprises to combat climate change and unemployment. The AAAP, with its four pillars, focuses on climate-smart agricultural investments, resilient infrastructure, green jobs for youth, and innovative financial instruments.
Adeniyi emphasised the Youth Adapt Program’s four-stage model, which supports enterprises from ideation to scaling with training, mentorship, and funding. He highlighted the importance of demonstrating a theory of change, projected climate impacts, and clear results while addressing gender, youth, and social inclusion to attract impact capital. “Our goal is to tackle two critical issues: the impacts of climate change and the high rates of youth unemployment and underemployment,” stated Fadekunayo during the webinar.
During the panel discussion, Olanrewaju Oniyitan, Founder & CEO, Wholistic Business Solutions, provided insights on the critical factors that determine the success of social impact proposals. She emphasised that since most impact applications are competitive, founders and entrepreneurs must make their propositions stand out and be unique. Oniyitan highlighted a common issue where businesses have solid models but fail to align their activities with broader funding objectives, leading to difficulties in securing funding and demonstrating their capacity to deliver. She stressed the importance of clearly articulating business models and ensuring their alignment with project goals to attract and maintain investor interest.
Amarachi Kalu, the Country Lead for the Challenge Fund for Youth Employment (CFYE) in Nigeria, shared valuable lessons for entrepreneurs on crafting compelling proposals to attract funding and achieve funding objectives. He addressed the challenge many businesses face in aligning their operations with a project’s theory of change, noting that businesses with good models often struggle to connect their activities with the overarching project objectives. This misalignment, he stressed, can hinder their ability to clearly articulate their vision and demonstrate their capacity to deliver on their promises.
The Head of Corporate Responsibility and Sustainability at TGI, highlighted the role the TGI Group has played in connecting social impact organisations to its agriculture value chains, particularly through its out-grower schemes. These collaborations, she stressed, provide scale benefits and support to social enterprises within the TGI supply chain, highlighting the role of large corporations in fostering social impact through strategic partnerships.
Feature Image source: Engineersforum.com.ng