Five Takeaways from the West Africa Deal Summit

May was a highly eventful month for the social investment community in the West Africa Region. The first-ever West Africa Deal Summit themed ‘Conversations that move Catalytic Capital for Impact’ was held on the 16th and 17th of May in Accra and doubled as the second? Ghana Impact Summit . Organised by Impact Investing Ghana , and the Nigeria National Advisory Board for Impact Investing (Nigeria NABII), the Summit centred on the burning imperative for action to elevate Catalytic Capital as a critical component of the region’s development financing strategy in the next decade and beyond. AVPA was a strategic partner for the event and specifically hosted a session for LPs, Fund Managers, and other actors on the supply side of capital to explore in detail the technical and operational challenges of co-investing in innovative financing for impact.

I reached a few conclusions?over the course of the summit:

1. The diversity of attendees at the event confirms the notion that West Africa is indeed experiencing a shift in the SME financing landscape and a broad range of actors are keenly interested in understanding the direction in which the landscape will evolve, and more specifically, the role of innovative financing instruments and structures in the emerging landscape.
2. There is widespread acceptance that investing for impact, in its diverse forms, must now be formally integrated into existing paradigms and practices in public sector financing across the region, and that local capital pools must be leveraged for catalytic investments. In this regard, updates shared at the Summit with respect to progress with operationalizing Nigeria’s Wholesale Impact Investment Fund (WIIF) and Ghana’s Ci-Gaba Fund of Funds were particularly encouraging.
3. Specifically, there is a strong sense among key actors that some of the region's?key financing pain points and risks such as currency devaluation and exchange rate instability are best mitigated by local, blended capital pools that are designed specifically to mitigate these risks.
4. The capital supply sector is rapidly maturing in its consideration of innovative financing and its deployment of resources towards strengthening its capacity for impact investing. The contributions and engagement from local fund managers across multiple sessions at the Summit suggest that investment in capacity development for innovative finance in recent years is yielding a more capable set of actors on the supply side of the ecosystem. This is however in slight contrast with the demand side, where there was broad consensus that despite the existence of viable enterprises that can effectively utilize Catalytic Capital across most markets in the region, there is still some way to go to enhance the capacity of SMEs to attract, receive and deploy innovative finance in their businesses.
5. More investment in knowledge generation is key to strengthening the impact investment ecosystem across the region. Using the discussion of navigating the challenges of co-investing as an example, a major takeaway was the need for more research to understand the challenge from multiple perspectives, and identify solutions that are currently being used to successfully facilitate multi-party deal structures, that could be more widely applied across the region.

The Summit was a huge milestone for innovative financing in the region and I keenly look forward to the positive impact of the ideas conceived, connections forged, and actions initiated at the Summit, in the coming years.

Author: Martin Eigbike - Program Lead - West Africa, AVPA