By Catarina Santos
Since 2007, Nigeria has attracted the most foreign direct investment in Sub-Sahara Africa due to its well-developed legal and banking systems. However, Boko Haram’s spread of violence to regions where oil and gas are extracted is now intimidating investors. Economically empowering youth is a key piece in this puzzle: the private sector needs a workforce, and youth need employment opportunities as an alternative to joining insurgent groups. Although radicalized Nigerians have not yet reached European or American cities, the potential for global economic impact from terrorism in Nigeria deserves attention. This article discusses the importance of the private sector’s involvement in fighting Boko Haram in Nigeria and recommends that the private sector focus on engaging in the northeast region of the country. The private sector should provide capacity building in various skills, especially sustainable agriculture practices; support youth education; and provide financial grants in areas that government programs have not reached.
A youth rally in Lagos, Nigeria in September 2012. Youth compose a significant portion of Nigerian society and lack economic opportunities, making them vulnerable to recruitment by Boko Haram. Photo courtesy of Flickr user Temi Kogbe, under a Creative Commons Attribution 2.0 Generic License.
By Waka Itagaki
This article is the second in a series from this author on the topic of impact investing. For Waka Itagaki’s earlier post on reducing transaction costs in development impact bonds, please click here.
Introduction and Background
The role that impact investors are playing in international development is increasingly growing. The amount of assets under management (AUM), the total market value of investments managed by financial institutions, in emerging countries was $36.4 billion in 2015. This is larger than the net Official Development Assistance (ODA) provided by the United States. International development actors should pay attention to this shift and become acquainted with the work of impact investors. One way to do this is through reading the annual impact investor surveys conducted by the Global Impact Investing Network (GIIN).
GIIN is a nonprofit organization that supports activities, education, and research that accelerate the development of a coherent impact investing industry. GIIN has conducted annual impact investor surveys since 2009 by leveraging its network of impact investors, and the surveys provide information on the current situation of impact investors. However, these surveys fail to acknowledge how impact investors are changing over time. Moreover, there is not much literature by other stakeholders that analyzes the data and discusses trends in impact investing in a consumable way. This article fills this gap by analyzing six GIIN surveys from 2009 to 2015 to illustrate how impact investors are changing.
By Erin Nealer
Microfinance was the trendiest new player in economic development for the first decade of the 2000s. In 2004 Vinod Khosla, founder and CEO of Sun Microsystems, called microfinance “one of the most important economic phenomena since the advent of capitalism.” In 2006 Muhammad Yunus, founder of the Bangladesh-based Grameen Bank, was awarded the Nobel Peace Prize for his work in establishing micro-loans for entrepreneurs struggling to rise out of poverty. Microlending programs such as Kiva, World Vision Micro, and Zidisha have sprung up to take advantage of the internet, creating peer-to-peer lending programs where individuals can supply small loans or pool funds for larger loans for entrepreneurs all over the world. The ability of microfinance institutions (MFIs) to reach those experiencing the greatest need and to provide long-term solutions for extreme poverty, however, remains uncertain.
The term “microfinance” refers to a broad umbrella of economic opportunities with one common objective: increasing access to financial services for those who are unable to access traditional banks. The theory is that small loans, savings accounts, insurance programs, and other basic financial services will provide the structure necessary for low-income individuals to lift themselves out of poverty, begin businesses, and provide for their families. MFIs that focus on underserved populations – particularly women, those living with HIV/AIDS, and populations in inaccessible rural areas – have the potential to enact great change in the lives of individuals, enabling them to participate in the local and global economy.
Women submit applications for microloans in Ghana. While microfinance is a popular and relatively new vehicle for increasing access to financial services, the lasting impact of microloans on business profits and overall income is negligible. Photo by Rachel Strohm via Flickr.
By Ariel Gandolfo
Chinese official foreign direct investment (OFDI) stock in Africa reached $21.73 billion in 2012, and China’s Premier Li Keqiang stated that total investment will reach $100 billion by 2020. Over 2,000 Chinese companies have invested in sectors such as infrastructure, natural resource extraction, finance, and power generation.
In some cases, Chinese companies are involved in multi-million dollar contracts with multilateral finance institutions. The recent $300 million partnership between state-owned China International Trust and Investment Corporation (CITIC) and the International Finance Corporation to provide affordable homes in African cities is just one example. While few African companies possess the technical skills to build on such a massive scale, African workers can at least take advantage of the employment opportunities that these construction projects generate, right? Continue reading
By Simone Schenkel
President Barack Obama and Indian Prime Minister Narendra Modi greet attendees of the U.S.-India CEO Forum in New Delhi, India. Photo Courtesy of the White House Photo via Pete Souza.
In a recent trip to India, President Obama announced the creation of the Indian Diaspora Investment Initiative, a U.S. Agency for International Development (USAID) and Calvert Foundation partnership that allows Indian-Americans to use would-be remittances to support key sectors such as financial inclusion, health, education, and agriculture.
While remittances have long been viewed as critical to supporting low-income countries, most funds are transmitted directly to households rather than to community resources. Through this public-private partnership, investors large and small will be able purchase Community Investment Notes later this year through the Calvert Foundation to fund a variety of social enterprise projects. Continue reading