Five million people in Africa are set to benefit from improved health, education and agriculture, under new schemes designed to encourage private individuals in the UK to invest for environmental or social impact.
The Department for International Development (DFID) has said it will pump £50m into the Agricultural Development Company (AgDevCo) in an effort to boost African farming. It says 650,000 will directly benefit through jobs and better incomes.
DFID’s £75m impact fund, which it launched in 2012, is already expected to offer a range of benefits to over 5 million people in the continent.
A new programme, called Advancing Impact Management Skills (AIMS), will educate the “new generation” of impact investment specialists in parts of Africa and Asia. Another, a network of fund managers, will guide these new professionals through investments that seek to tackle health, education and water challenges.
International development secretary Justine Greening, who revealed the programmes at the FT/IFC Sustainable Finance Conference on Thursday, said, “Part of the solution to hunger in Africa is for Africa’s farmers and agricultural sector to be able to produce the food it needs for itself.
“Smart UK investment like this will help thousands of farmers develop their businesses to grow food for millions, whilst generating revenues that can be reinvested back into Africa’s agricultural sector.
“This sort of innovative, self-sustaining, job-creating investment which generates a return that can be itself reinvested will become an increasingly important part of DFID’s development approach.”
The strategy known as impact investment involves making a positive difference. A survey earlier this year by JP Morgan and the Global Impact Investing Network (GIIN) predicted that by the end of 2013, some £5.6 billion would be invested using this strategy globally.
Eurosif – the European Sustainable Investment Forum – found in November 2012 that the most common motivation for high net-worth individuals investing in this way was a desire to contribute to sustainable development. Philanthropy, contributing to local communities and financial incentives were also popular.