Investing for Impact in Africa

In this post, Ermias Mengistu, Director of IESE’s Africa Initiative shares his takeaways from an engaging panel discussion co-hosted by the Africa Initiative and IESE’s recently launched Institute for Sustainability Leadership. 

This week, IESE’s Africa Initiative and the Institute for Sustainability Leadership hosted a very engaging and insightful Africa-focused impact investing panel brilliantly moderated by Prof Fabrizio Ferraro! Thank you so much Abubakar SuleimanFunda SezgiCristina Ventura Serra and Sebastian Waldburg for the generosity of your insights on the panel and for your continued support of IESE.

The diversity of perspectives on, among other things, the meaning of impact or challenges of attracting institutional capital and what it would take to unlock the continent’s potential, was very enriching.  The CEO of arguably one the most innovative banks in Africa; the CEO of an impact ecosystem that recently closed a $205 million Africa-focused fund, the GP of a traditional APAC & Americas VC fund, and the Co-founding Partner of a fund of impact funds had indeed all very interesting insights.

Our esteemed panel of speakers with Professor Fabrizo Ferraro.

Here are just a few of the many takeaways that I personally took away from the conversation:
– While tech is a key enabler (allowing Africa to leapfrog in crucial areas), “boring” companies creating solutions that address Africa’s pressing needs are the ones driving real impact.
Development Finance Institutions (DFIs) continue to play a critical role in mobilizing private capital in Africa, de-risking impact-related investments, echoing the critical role European Investment Fund plays in accelerating the impact investing ecosystem in Europe.
Infrastructure remains a significant hurdle that puts a ceiling to how big a company can get, pivotal for sustainable development and impact.
Unicorns are crucial success stories serving as role models to showcase and demonstrate traction to attract foreign capital.
The importance of story-telling to mobilize the largely untapped local capital, which will then attract foreign institutional capital.
Why is it that investors seem more willing to pour money into cryptocurrency than into ventures generating tangible impact?

The level of interest that this session generated, the engagement and interaction in the room was very inspiring and encouraging the Africa Initiative to continue engaging key actors actively working to unlock the continent’s full potential as the world’s next epicenter of growth.

Written by Ermias Mengistu, Director of Africa Initiative (MBA 06)

[This article is re-posted from Linkedin]

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Associate Director, Admissions (MBA '16)

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