The impact investing industry in West Africa is comparatively small, but growing, totalling US$6.8 billion over the past decade, according to research by the Global Impact Investing Network (GIIN).
According to a new report released by GIIN in partnership with Dalberg and the UK government today, the available data for figures released shows impact investing in the West African region came to US$6.8 billion between 2005 and mid-2015; with 45 impact investors active in the region.
However, West African activity is small compared to other regions. East Africa, for example, received a total of US$9.3 billion in impact investment over the same period, despite the region’s gross domestic product (GDP) being less than half of West Africa’s.
Of the 45 impact investors identified in West Africa, 14 are development finance institutions (DFIs), and a further 31 are non-DFI or other investors.
The study finds DFIs are responsible for 97 per cent of the total impact investing capital in West Africa. In the decade in question, DFI investment increased at a compound annual growth rate of 18 per cent, from US$190 million in 2015, to US$852 million in 2014.
Within the region, Nigeria and Ghana together attract more than half – 54 per cent – of all impact capital.
Nigeria received the largest amount of impact capital, at 29 per cent; while Ghana received almost the same amount at 25 per cent. The similarly high figures are noteworthy particularly in the light of the fact that while Nigeria accounts for 80 per cent of the region’s GDP, Ghana accounts for only 5 per cent. According to GIIN, the comparatively high levels of impact capital going to Ghana reflects its “business-friendly policies”.