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By Henry Uche
Experts in development economics, management, administration and other fields on Tuesday and Wednesday rang the bell for a pool of Catalytic Capital in the ears of political leaders and other resource managers in the West Africa subregion for real economic growth and development.
Hosted by Impact Investors Foundation (IIF), they made this call at the 2024 West Africa Deal Summit / 7th Annual Convening on Impact Investing with the theme ‘Actions to Deepen Catalytic Capital in West Africa’ with a focus on actionable strategies and partnerships that accelerate impactful investments in Africa.
With the presence of leaders in impact investing, philanthropic organisations, government representatives, and private sector players from Ghana, Senegal and other West African countries; the session deliberated on ways to mobilize investment, foster innovation, and deepen partnerships that create lasting change as the region suffers unwarranted resource curse.
During panel sessions, the Pan-African corporate leaders spotlighted four strategic pillars, central to unlocking impactful capital for the economic advancement of the region viz: Empowering Locally -led initiatives; creating an enabling investment climate; strengthening the Catalytic Capital Africa (2CAfrica) Campaign’s Impact; and tracking/ reporting on Impact Commitments.
As a target set for themselves, the forum projected $100 million in new catalytic capital commitments to be sourced from impact investors, the private sector, and other financial institutions, to fuel impactful projects across the region. Also, concrete and actionable policy recommendations were expected.
In a presentation on ‘Context Mapping and Market Landscape for Catalytic Capital in Nigeria'(Report Overview and Research Insights) by Dr Olu Ogunfowora, they recommended the development of a national framework and strengthening of regulatory environment for catalytic capital deployment, and the framework should be developed through multi-stakeholders engagements to reflect diverse views.
“Inter-agency collaborations across key government MDAs should be strengthened and governments should establish a dedicated office on impact investing. We must forge new and strengthen existing public-private partnerships (PPPs) that enhance risk mitigation and patient capital flows.
“There should be support for market builders local intermediaries and accelerators that can provide technical assistance and mentoring to enterprises seeking catalytic capital. We must diversify portfolios and embrace patient capital approaches. Investors, including Limited Partners and general partners, should diversify their portfolios by including a mix of traditional and catalytic investments”
Ogunfowora continued, “We must support investment readiness and prioritise technical assistance for impact enterprises: Develop in-house accelerator programs or leverage existing initiatives. There is a need to leverage collaborative investments and subordinated positions: Promote consortiums and co-investment platforms where multiple investors can pool resources and share risks, leading to larger and more impactful Investments.
“We must enhance impact measurement and management (IMM) mechanisms and adopt robust impact measurement and management frameworks to track the social and environmental impacts of investments”
He added that there should be a strategic alignment of business models with catalytic capital opportunities. “We must build strong business foundations and iteratively adapt and innovate; focus on developing robust business plans, pitch decks, governance structures, and management teams.
“We should implement effective impact measurement, management (IMM) and reporting systems and cultivate new and strengthen existing investor relationships and consistently network and engage in ecosystem initiatives”
For Market Builders and Enterprise Support Organisations, he called for capacity building for enterprises through training programs to help impact enterprises become investment-ready.
“We need to facilitate impactful linkages and connections and foster ecosystem collaborations. Act as connectors between impact enterprises and potential investors. Promote a greater understanding of catalytic capital. Educate both investors and enterprises about the concept, benefits, and mechanisms of catalytic capital.
“There is a need to support innovation and research collaboration. Conduct and disseminate individual and joint organizational research on emerging trends, best practices, and successful models in catalytic capital and impact investing” he concluded his presentation.
Meanwhile, the Lagos state governor, Babajide Sanwo- Olu pledged to do everything within his power to encourage local and foreign investors to improve life of citizens in the state.
Represented by the Commissioner for Economic Planning and Budget, George Mosopefolu, he assured that his administration would not let anyone down in his quest to deliver good governance.
“We shall strive to make the environment conducive for both local and foreign investors. This is what we believe, and it’s in the interest of everyone living here. We want to leave a legacy worth remembering” he added.
