This is a joint statement of Impact Investing Ghana, Nigeria National Advisory Board for Impact Investing, the Impact Investing Taskforces in Senegal and Burkina Faso, the UN in Ghana, LEAP Africa, Mennonite Economic Development Associates and the Mastercard Foundation Africa Growth Fund and other partners on the occasion of the inaugural West Africa Deal Summit on the theme “Conversations that move Catalytic Capital for Impact”.
The West Africa Deal Summit was designed to start conversations and partnerships to significantly increase catalytic capital for investment in SMEs for impact and the attainment of the SDGs.
- For the SDGs to be achieved across West Africa, significant financing needs to be mobilised from the private sector.
- SMEs are the backbone of economies in Sub-Saharan Africa (SSA), estimated to constitute circa 90% of businesses, employing 80% of the workforce and contributing 70% to GDP and nearly half (46%) of these are owned by women. SMEs thus present opportunities for significant environmental, social & development impact and inclusive growth in SSA.
- However, available financing for SMEs is mostly debt with limited access to patient and appropriate financing. The financing gap for SMEs in SSA is estimated at US$331B. SMEs require smaller investment sizes, between $50,000 and $2 million, than the current investing landscape can provide and youth, women, and people living with disabilities face additional barriers in accessing financing.
- SMEs have the potential to contribute significantly to SDG attainment and increase inclusive growth, gender equality, youth employment and climate resilience.
In this regard, we call upon
- The Global community to address gaps in the international financial architecture and play fair with capital and investment flows to Africa.
- African governments to increase their efforts in improving Africa’s business and investment environment.
- Catalytic capital providers including foundations and family offices, international development agencies, and development finance institutions to deploy capital in ways that are truly catalytic and that unlock domestic financing and build local financing ecosystems.
- Local capital providers and businesses to collaborate and share knowledge and to integrate sustainability and impact measurement and management into their organizations so that African businesses can scale and grow in ways that are not destructive taking into account the ecological boundaries and social foundations that we must all live and work within.
- Local capital providers and businesses to explore opportunities for inclusive growth including promoting equity for women and youth, people with disabilities, rural and vulnerable communities, and addressing climate vulnerabilities.
We commit to take action individually and collectively to enable these things to happen. It is time to truly move capital in ways that are catalytic to fill the SME financing gap and to drive inclusive growth that leaves no one behind. We look forward to reviewing progress at the second West Africa Deal Summit in Nigeria in 2024.