Bridging Africa’s financing gap

In a recent interview with CNBC Africa, Vuyiswa Ncontsa, Regional Director for the Southern Africa Venture Philanthropy Alliance, shed light on the social investing landscape in Southern Africa and the crucial role it plays in bridging the continent's financing gap. With a focus on social entrepreneurship, Ncontsa emphasized the importance of mobilizing capital for social, environmental, and governance impact alongside financial returns. The African Venture Philanthropy Alliance (AVPA) is a pan-African network of social investors dedicated to increasing the flow of capital into Africa. Ncontsa highlighted the significant gap in financing for the Sustainable Development Goals (SDGs), which was estimated to be between $500 billion and $1.3 trillion prior to the COVID-19 pandemic. With the impact of COVID-19, the SDG financing gap has surged to an estimated $3.9 trillion, underscoring the urgent need for investment in the region. Despite the challenges posed by the pandemic and the diminishing international aid, Ncontsa remains optimistic about the opportunities for impact investing in Africa. By leveraging just 1% of the global finance total, she believes that the continent can bridge the SDG financing gap. AVPA works with a diverse group of investors across the capital continuum, including grant providers, equity investors, debt providers, and those offering technical assistance. In Southern Africa, where challenges such as youth unemployment, healthcare, and education persist, social investors see an opportunity to make a meaningful impact. Ncontsa acknowledged the difficulties faced by businesses in the region, particularly due to issues like load shedding, which have had a detrimental impact on SMMEs. However, she emphasized the importance of viewing these challenges as opportunities for investment and growth. One of the key myths surrounding social investing is the notion that investors must sacrifice financial returns for social impact. Ncontsa dispelled this myth, stating that social investors aim to achieve positive social returns while also realizing financial gains. By partnering with entities that prioritize both social and financial returns, AVPA seeks to drive sustainable change in the region. As AVPA prepares to launch its membership program with 50 founding members on July 12th, Ncontsa underscored the importance of collaborative partnerships in addressing social challenges. The program aims to attract a diverse range of members, including private equity investors, philanthropists, corporate social investors, and family offices. Ncontsa also addressed the misconception that black philanthropists prioritize personal wealth over social impact. She highlighted the significant contributions made by black philanthropists in areas such as education, health, and youth entrepreneurship. Through initiatives like the family office breakfast on July 13th, AVPA is working to create a platform for global and continental family offices to collaborate and drive positive change. In conclusion, Ncontsa's insights shed light on the critical role of social investing in Southern Africa and the potential it holds for driving sustainable development and addressing pressing social challenges in the region.