The Nigerian National Advisory Board for Impact Investing (NABII) has announced the release of its latest report titled “Investing for Impact in Nigeria: A Detailed Analysis of the Agriculture, Education, and Health Sectors.” The report sheds light on the limited capacity of the Nigerian financial market to meet the funding demands of Micro, Small, and Medium Enterprises (MSMEs) in terms of equity funding, grants, low-cost debt financing, and patient capital.
Unveiled during the 6th Annual Convening on Impact Investing in Lagos, the report puts forward recommendations for investing in MSMEs, particularly women-owned businesses. One of the key proposals involves the unlocking of pension funds to mobilize capital for driving growth in these sectors. The study, conducted by the Nigerian Economic Summit Group (NESG) and NABII, supported by the Global Steering Group for Impact Investment (GSG), OTT Impacto, and funded by the International Development Research Centre (IDRC), highlights the predominance of international investors in the impact investment landscape in Nigeria. Local investors, on the other hand, perceive such investments as lacking in financial returns.
The report provides significant insights into policy recommendations for enhancing the impact of investments in the Agriculture, Education, and Health sectors. Its release marks an important step towards mainstreaming impact investing in Nigeria and attracting private capital to achieve the Sustainable Development Goals (SDGs). Etemore Glover, the Chief Executive Officer of NABII, expressed the organization’s commitment to enhancing awareness, stakeholder acceptance, and enterprise development for impact funds.
A key finding of the report reveals that the agriculture, financial services, and energy sectors have been the consistent recipients of impact investment from Development Finance Institutions (DFIs) over the past five years, while investments in the Education and Health sectors have stagnated since 2018. The report recommends the inclusion of impact investing criteria in investment guidelines for pension funds, an increase in asset allocation to impact investing products, and the approval of direct investment in listed local companies that adhere to Environmental, Social, and Governance (ESG) standards.
During the panel session for the report launch, Agudah Oguche, CEO of the Pension Fund Operators Association in Nigeria, emphasized the importance of research-backed policies for a more inclusive economy. Dr. Olusegun Omisakin, the Chief Economist at NESG, emphasized the significance of asking the right questions to understand critical stakeholders and advocated for collaborative research to create a compelling narrative and context.
Lolade Awogbade, the Sustainability Specialist at the Development Bank of Nigeria (DBN), discussed the bank’s funding model and the role of its subsidiary, Impact Credit Guarantee, in empowering banks to lend to MSMEs.
The release of the report marks a significant milestone for the development of the Impact Investing market in Nigeria, with its insights and recommendations intended to guide policymakers and stakeholders in creating a conducive environment for the flourishing of Impact Investing. The full report is available for download here: “Investing for Impact in Nigeria: A Deep Dive into Agriculture, Education, and Health Sectors.”