Does Africa Need Sustainable Investment?

By David Abraham

The IFC and EMPEA recently hosted the Global Private Equity Conference in Washington, DC.  The annual event draws in hundreds of professionals from both the institutional and investment sides of the private equity world and I was fortunate enough to attend.  Everyone was focused on how how fund managers can best attract capital for business growth in developing countries in the wake of the financial crisis.  For me, the best part of the event was interacting with the many attendees from sub-Saharan Africa to learn more about the ongoing investment trends on the continent.  A venture capitalist from Nigeria even gave me a primer on “post-conflict investing” in Sierra Leone and Liberia.

One of the interesting conversations I had was with Graham Sinclair, the owner of SA based investment advisory firm SinCo.  He has also just launched the Africa Sustainable Investment Forum (AfricaSIF) with 11 other Africa-based advisors.  When I told him about the position I took in my last post on 3P regarding the World Bank loan to Eskom for a coal-fired power plant, he was dismayed.  He not only pointed to the governance issues posed by the ANC (SA’s leading political party) involvement in the deal, but further stressed that, sometimes, South Africa obscures its advanced economic standing to shirk the ideals of sustainability.  This in the face of preparing to host the World Cup – an exercise reserved for only a handful of nations.

With AfricaSIF, Mr. Sinclair is seeking to create an independent network of pan-African investment practitioners committed to the ideals of sustainable investment.  AfricaSIF, a non-profit organization, is aiming to create a forum where private firms, government institutions, venture philanthropists, and individuals (including those in the African diaspora) can begin to think about and act upon the future of sustainable investment on the continent.

AfricaSIF is holding its kick-off event (no pun intended) at the Johannesburg Stock Exchange on June 9.

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David Abraham is an MBA candidate at the Robert H. Smith School of Business at the University of Maryland.  He is a founder of the Emerging Markets Association at Smith which seeks to build a greater understanding of free-market opportunities in frontier markets.

The posts on this page are contributed by students from the University of Maryland's Robert H. Smith School of Business in conjunction with the newly launched Center for Social Value Creation. The center's mission is to develop leaders with a deep sense of individual responsibility and the knowledge to use business as a vehicle for social change. These posts are a way to continue the dialogue outside of the classroom and share the viewpoints of Smith students on the challenges and opportunities of triple bottom line thinking.