IMPACT@AFRICA NETWORK
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About the Impact@Africa Network
“Impact investments are investments made in companies, organisations and funds, with the intention of generating measurable social and environmental impact, in addition to financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on the circumstances. Impact investments can be made across asset classes, including but not limited to, cash equivalents, fixed income, venture capital and private equity.” Global Impact Investing Network (GIIN)
The Impact@Africa Network is an organisation that has been formed in order to bring together all ecosystem players, provide a strong unified voice and facilitate the implementation of the Action Plan and other key ecosystem strengthening activities, oversee and support the implementation of the Action Plan through the coordination of sector stakeholders. In order for the Impact Investment in Africa Intermediate Outcomes to be achieved, coordinated action across all stakeholders in the impact investment sector ecosystem will be necessary. The Impact@Africa Network aims to support the implementation of the Action Plan through the coordination of sector ecosystem stakeholders.
Africa’s Impact Investors • DEVELOPMENT FINANCE INSTITUTIONS • DONORS • FOUNDATIONS • FUND MANAGERS OF ASSET MANAGEMENT FUNDS • INSTITUTIONAL INVESTORS • PRIVATE EQUITY FUND MANAGERS • PRIVATE FOUNDATIONS • VENTURE CAPITAL INVESTORS
United Nations Development Programme (2015). Impact Investment in Africa: Trends, Constraints and Opportunities.
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Impact Investments Impact investments represent an investment practice of the investment continuum that see investors intentionally seeking to create social, environmental, as well as financial value. Impact investments constitute one of the more proactive and promising approaches to responsible investment, representing a huge opportunity to contribute to the implementation of Sustainable Development Goals (SDGs) (UNDP, 2015). In Africa, investments have tended to focus on sectors where governments have traditionally not been able to deliver social services (e.g. education, finance, healthcare), and where a viable market solution can provide goods and/or services (UNDP, 2015). Historically, African governments have supplemented public spending with inflows of official development assistance (ODA) from developed and other emerging markets (UNDP, 2015). Consequently, impact investments can potentially complement public spending and ODA, by crowding-in private sector social capital and skills in order to reduce African economies’ vulnerability to external shocks (UNDP, 2015). By providing a market-based solution to
address socio-economic needs, ODA inflows and public spending can be directed to address social needs for which no viable market-based solution exists (UNDP, 2015). However, impact investment in Africa has not yet realized its potential owing to an under-developed impact investment support ecosystem.
Impact Investment in Africa Action Plan The ultimate aim of the Impact Investment in Africa Action Plan (the Action Plan) is to support the development of a vibrant impact investment sector on the continent. The Action Plan outlines the preliminary interventions that will be required to support the initial development of the impact investment sector in Africa. The Action Plan was developed in line with input from a number of stakeholders and experts in the lead up to the “Impact Investment in Africa Public Private Dialogue (PPD)” held between 24-26 November 2015, at the Africa Finance & Investment Forum held in Cape Town, South Africa. The Action Plan set out five Impact Investment in Africa Intermediate Outcomes and seven Supporting Actions for Implementation of the Impact Investment Action Plan Outcomes.
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Intermediate Outcomes Supporting Action
The Impact Investment in Africa Intermediate Outcomes are based on an extensive consultation and recommendations from sector stakeholders on how to alleviate the challenges identified in the Impact Investment in Africa: Trends, Constraints and Opportunities Report.
Vision
IMPACT INVESTMENT IN AFRICA INTERMEDIATE OUTCOMES
Strong pipeline of impact investees that are able to meet financial, social & environmental requirements
Good practice in impact investment by high capacity, skilled and experienced impact investors
A vibrant impact investment sector in Africa
Enabling policy and regulatory environment in which impact investment can thrive
Consensus on and broadbased adoption of impact measurement standards & metrics to demonstrate social & environmental returns Appropriate infrastructure & mechanisms to facilitate impact investment deals
Co-ordinated action across ecosystem stakeholders to leverage off existing efforts, share knowledge & best practices, & facilitate engagement & action.
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SUPPORTING ACTIONS FOR IMPLEMENTATION OF THE IMPACT INVESTMENT ACTION PLAN OUTCOMES
The Log Frame The Log Frame that follows illustrates specific outputs, activities, proposed implementing actors and resource commitments proposed and available to achieve the outcomes of this Action Plan. The Log Frame discusses seven key outcomes as follows:
COORDINATED ACTION ACROSS ECOSYSTEM STAKEHOLDERS TO LEVERAGE OFF EXISTING EFFORTS, SHARE KNOWLEDGE & BEST PRACTICES, & FACILITATE ENGAGEMENT & ACTION
INDICATIVE TIMELINES
Develop a co-ordinating body primarily responsible for the co-ordination of stakeholders & implementation of the Action Plan.
2016
2017
2018
2019
2020
Detailed sector ecosystem mapping (to build on initial efforts included in the report) and identification of key stakeholders to ensure broad-based participation in the realisation of the vision.
2016
2017
2018
2019
2020
Commission research to provide detailed contextual understanding of the baseline, what is in existence & current gaps within each pillar & develop case studies, models & good practice guidelines for knowledge sharing.
2016
2017
2018
2019
2020
Advocacy & awareness raising, including presentation of case studies & business case to key implementation partners such as policy makers.
2016
2017
2018
ONGOING
Strategic networking and facilitation of linkages between ecosystem actors to facilitate action based on mapping and research initiatives.
2016
2017
2018
ONGOING
A. Outcomes 1 and 2 aimed at facilitating a broader conducive environment for the successful implementation of the action plan: 1. A coordinating network primarily responsible for implementation of the action plan and coordination of relevant stakeholders. 2. A dynamic advocacy and awareness raising programme on impact investment in Africa. B. Outcomes 3 to 7, specialized activities to support the development of a dynamic impact investment sector in Africa: 3. A strong pipeline of viable impact investees that are able to meet financial, social and/or environmental requirements. 4. Enabling policy and regulatory environment in which impact investment can thrive. 5. Good practice in impact investment by high capacity, skilled and experienced impact investors. 6. Appropriate infrastructure and mechanisms to facilitate impact investment deals. 7. Consensus on and broad-based adoption of impact measurement standards and metrics to demonstrate social and environmental returns.
Infrastructure in the context of this Action Plan refers to the institutions, tools and instruments required for the impact investment industry to develop. This includes but is not limited to impact investment member networks and similar associations, appropriate funding mechanisms and models, appropriate platforms to source and make deals etc.
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CAPE TOWN DECLARATION ON IMPACT INVESTMENT IN AFRICA November 26, 2015 Lord Charles Hotel, Cape Town, South Africa
WE, the more than 150 representatives of African government ministries; social enterprises; SME business development and advisory services providers; commercial banking institutions; development finance institutions; African regional economic communities; bilateral and multilateral development partners; economic researchers and business focused academia; innovation and technology institutions; policy making and advocacy institutions; public and private sector impact investment practitioners and the media from more than 40 countries; gathered in Cape Town, South Africa, 24-26 November 2015 for the 8th African Finance & Investment Forum (AFIF 2015), held under the theme “Access to Finance / Promoting Entrepreneurship”, within which an African Union and UN Development Program “Public-Private Dialogue on Impact Investment in Africa” was convened; ACKNOWLEDGING our appreciation to the Government and People of South Africa for graciously supporting and hosting AFIF 2015, which has offered us an opportunity to share amongst ourselves strategies for promoting impact investment, committing ourselves to the development of Africa’s impact investment sector – and to dedicate ourselves to helping to implement a number of sector development strategies in Africa over the next three years; RECOGNISING the importance that has been placed on private sector development and engagement as a critical catalyst for economic transformation in Africa by the member states of the African Union in its strategic plan, “Vision 2063: The Africa We Want”, as well as the important role that the private sector and private sector investment is expected to play in the achievement of the 2015-2030 Sustainable Development Goals (SDGs); ENCOURAGED by the growing body of work that has been undertaken by the Global Impact Investment Network and various international and continental stakeholders, particularly amongst foundations, development finance institutions and academic institutions to structure and expand investment in the impact investment sector and to develop more universally accepted impact measurement standards; WELCOMING the contribution of UNDP in engaging and bringing together key continental and international stakeholders leading up to this important meeting, and appreciative of the work that has been undertaken in the related report entitled “Impact Investment in Africa: Trends, Constraints and Opportunities “; AWARE of the various interviews and consultative processes that have preceded this meeting, including:
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The 7th African Union Private Sector Forum (Nairobi, Kenya, a) 2014); The Sankalp Africa Summit (Nairobi, Kenya 2015); b) The African Grantmakers Network Assembly
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c) (Arusha, Tanzania 2015); and the The 3rd Financing for Development Conference - AU – UNDP d) - Swiss Development Corporation Impact Investment Side Event (Addis Ababa, Ethiopia 2015); UNDERSTANDING the need to address the challenges that have impeded the growth of the impact investment sector in Africa, including, but not limited to: poor understanding of the potential of impact investing and the inherent assets and resources in the continent; limited capacity among both social enterprises and impact investment fund managers; a relatively weak impact investment regulatory and policy enabling environment; inadequate mobilization, allocation and utilization of possible funding streams to support impact investment growth; limited engagement with continental and international development finance institutions to leverage their potential support for the sector; and too few social enterprise and SME focused business development advisory service providers and business incubators, coaches/ mentors and entrepreneurship development initiatives; COMMITTED to the Impact Investment in Africa seven point Action Plan to catalyze and strengthen impact investing in Africa through: 1) the establishment of an industry network/ convening organ; 2) the development of a dynamic advocacy program; 3) improvement in the origination and preparation of potential impact investment opportunities (i.e. pipeline development); 4) preparation and adoption of required enabling regulations and policies and legal frameworks; 5) the development of greater capacity throughout the impact investment sector, including the creation of a designated Africa impact investment fund, or fund of funds 6) establishment of critical infrastructure and a robust impact investment ecosystem; and 7) development and adoption of clearly defined and agreed upon; impact measurement standards, monitoring and evaluation processes, and professional practice; WE HEREBY CALL UPON ALL STAKEHOLDERS, INCLUDING INVESTORS, GOVERNMENTS, THE PRIVATE SECTOR, DEVELOPMENT FINANCE INSTITUTIONS, CIVIL SOCIETY, DEVELOPMENT PARTNERS AND DONORS, AND OTHER MEMBERS OF THE IMPACT INVESTMENT COMMUNITY IN AFRICA, TO WORK TOGETHER TO SUPPORT AND OPERATIONALIZE THE ACTION PLAN (ATTACHED BELOW) FOR THE DEVELOPMENT OF THE IMPACT INVESTMENT SECTOR IN AFRICA. FURTHERMORE, WE AGREE THAT WE WILL RECONVENE AND ENCOURAGE OTHER KEY STAKEHOLDERS TO ATTEND AN ACTIONPLAN IMPLEMENTATION KICK-OFF MEETING IN THE SECOND QUARTER OF 2016! This Declaration was adopted by the participants who attended the 2015 African Finance and Investment Forum.
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