The Landscape for Social Investments in Africa

 

The Landscape for Social Investments in Africa

This inaugural AVPA study, The Landscape for Social Investments in Africa, maps the diverse field of social investment across East, West and Southern Africa. In each of these regions, hundreds of institutions are deploying capital to achieve ambitious social and environmental goals.

Social investors include foundations, corporates, family offices, high net worth individuals, sustainability-aligned fund managers, development finance institutions, bilateral and multilateral donors, governments, diaspora, and faith-based organisations.

This report maps these providers of social capital, their investment strategies, and opportunities for collaboration amongst the various investors. Much more innovation and collaboration amongst social investors is needed if African countries are to close the enormous Sustainable Development Goals (SDG) financing gap. 

The study was commissioned by AVPA with support from the United States African Development Foundation (USADF), Social Capital Foundation, The Rockefeller Foundation, and an anonymous donor.

Sub-Saharan Africa Comparative Analysis

Social Investment in Africa Social investment is an umbrella term that encompasses the diverse range of capital providers working to achieve social and/or environmental impact in Africa. AVPA promotes collaboration amongst social investors across the “Continuum of Capital” to maximise the impact and sustainability of social capital flows.  

Continuum of Social Capital

Key Findings

Overview of Key Social Investors in SSA

Capital deployed by various social investors

Social Investors

The research identified over 820 social investors active in East, West, and Southern Africa.

  • Donors, development finance institutions, and sustainability-aligned fund managers are the largest providers of social capital across the SSA regions deploying billions of dollars annually. However, corporates and corporate foundations are emerging as strong drivers of regional social investment ecosystems.
  • Large pools of social investment capital deployed by African diaspora communities and faith-based organisations represent a significant opportunity for collaboration with other social investors to make progress in key social sectors such as health care, education and affordable housing.
  • The majority of social investors have a focus on East Africa, which can be attributed to the region’s economic growth and increasing level of entrepreneurship and innovation over the years.
 
 

Regional Trends

  • Southern Africa has seen more active participation by capital providers headquartered in the region compared to East and West Africa.
  • The governments in Southern and West Africa have been driving the development of innovative structures for deploying social investments.
  • Giving by individual/family philanthropists in East Africa remains less structured and highly private compared to West and Southern Africa.

Demand

  • The supply of social investment capital in the SSA region remains significantly mismatched with demand from social enterprises and impact businesses, particularly for small and medium enterprises giving rise to the “missing middle” financing gap.
  • With declining funding from donors and international foundations, non-profits are exploring alternative and more sustainable funding models.

Enabling Environment

  • The Southern Africa region is ahead of the East and West Africa in terms of the establishment of policies and regulations aimed at boosting the growth of the sector.
  • Southern Africa has seen philanthropy advisors’ establishment, focused on strategically mobilizing and deploying philanthropy funds.