- Sarah Burns
Why I’m Rethinking Impact Investing in African Markets
A year ago, I quit a job that on paper was a perfect fit for me. My PhD research, which I have been conducting for five years at Oxford, focuses on how to use private investment as a tool to generate sustainable and ethical development in post conflict Africa. The job I had been hired to do was working with a high net worth client looking to invest a significant amount of money in a fragile African country going through peace talks. I was asked to propose an investment strategy and potential portfolio that would balance financial returns, social impact and risk. It was a project that allowed me to put my five years of research to tangible use.
However, after working with the client for six months, it became clear that our values and objectives did not align. The investor placed his efforts on opportunities that would provide him with political influence in the country. When speaking with local officials and regulators, his intentions were to cut corners and to do business in a way which I deemed unethical. Over time, I came to the conclusion that his plan for the investments was focused on personal power and not sustainable development. I spent a number of months trying to persuade him to follow my investment strategy but failed. When I realized that I would not win the debate, I had no other choice but to quit my post. I morally could not continue working on a project which I thought could bring harm to the local community.
I became frustrated and angry at the system for the impact investing world. Of course, there are some wonderful individuals and institutions who are doing excellent work in the field. However, my experience has shown me that sometimes the people who have access to a lot of capital and can join this market, are not necessarily the ones who should. The market, particularly investments into Africa, is 100 percent exclusive to those with access to large sums of money and have access to information on unique deals. Yet, I know so many people in my network who would want to contribute to impactful businesses in African markets but do not have the resources or tools to do so. By keeping the impact investment world exclusive, we are cutting off a vast amount of resources and good intentions, and instead allowing the rich to buy their way into the market. This market should be open to all of those who are interested, to allow individuals to safely put their finances to impactful causes and provide much needed capital to African businesses.
As the Covid-19 pandemic began, it became clear that the African continent’s investment flows will weaken as many institutions are forced to work on projects closer to home. This has deepened the need for alternative methods for increasing finance on the continent. I knew that the previous system would not be enough to help businesses survive the crisis.
This is how I came up with the idea for NIA, the first equity and debt crowdfunding platform that allows average individuals from developed countries the opportunity to safely and appropriately invest in high-impact African businesses. We aim for growth stage businesses who are looking for $50,000 to $1,000,000. Investors have the opportunity to choose which businesses they would like to support and can do so with as little as £50. Investors receive financial and impact returns from their portfolio.
After years of in-depth research, I also know the importance of value addition and technical support for businesses in portfolios. Unlike other crowdfunding platforms, NIA remains partners with the businesses we fundraise for by providing this support throughout their investment term. Our focus is on sustainable and ethical growth that provides much needed goods, services, jobs and opportunities for local communities.
Starting a new business throughout a pandemic has required perseverance, grit, and a little bit of madness. But at Nia, we believe that there is immense opportunity for growth and development in the region through the businesses in our portfolio. We hope you will join us and believe in them too!