Leapfrogging Investment

Why?            Vision            Proposition 

 Can we leapfrog investment in Africa straight over investment-as-usual to sustainable finance and responsible investment? Why cannot all investment in Africa take ESG issues into account? We believe that answers to the challenges of sustainable development and the growth of Africa may be met via collective insight and collaborative effort from many sectors. We understand that development in Africa must be sustainable, and many investors are looking to invest in Africa and understand the “long term story”.  As stakeholders in investment decisions, AfricaSIF is for Africa and the world, pulling together investment policymakers and practitioners around the nexus of Africa, investment, and sustainable development. 

[A]fter many pulled out [of Africa] as a result of the global financial crisis...[b]ut that is starting to change as minimal interest rates in developed countries once more propel investors to higher-yielding, growing economies. - Reuters Nov 2009

We believe AfricaSIF will be a lead in enabling economic development in Africa. By adopting the very latest sustainability thinking, we will encourage development in Africa while balancing issues such as climate change and wealth and digital divides. With its recent economic growth, Africa is emerging as the land of new investment opportunity “where investments throughout the continent are consistent with the fundamental principles of social responsibility and attractive risk-adjusted returns”. 

AfricaSIF is the platform for scaling up answers regarding sustainable investment in Africa and connecting institutions, organizations, governments and individuals in this effort. Société Générale highlighted the “Africa Factor” in their 2008 paper: Africa is already a strong growth driver for European companies, with 50% of multinationals operating in Africa. A sector-by-sector analysis by Société Générale evaluating the opportunities and risks in 2008 and in the future for European companies – both financial and extra-financial - found over 40 companies where Africa accounts for more than 6% of group revenues. (This is significantly higher than for the BRICs or CEE countries). 

Société Générale forecasts strong anticipated 5-year growth rates in Africa could be the key in compensating for the downturn in growth in developed markets. Africa has strong long-term growth prospects to 2050. SocGen’s analysis is that: 

“Africa is experiencing a profound demographic transition which will facilitate its economic take-off. This missing link – together with agricultural and natural resources factors, as well as an improving picture on social and political criteria – will support a major demographic dividend which could drive African growth through to 2050.”  

“Guys, you Americans are lazy investors. There’s so much growth here but you want to float in the shallow water of the Dow Jones or Nasdaq.” 

Mo Ibrahim, Sudanese entrepreneur, founder of Celtel/ZAIN and founder and Chairman of the Mo Ibrahim Foundation, institution awarding the Ibrahim Prize, quoted by Bono, lead singer of U2 and co-founder of the advocacy group ONE and (Product) RED  in “Africa Reboots”, New York Times 18 April 2010