By Jeph Ajobaju, Chief Copy Editor
Impact investment in Africa’s development is the best way to lift the continent out of economic doldrums and propel its 1.21 billion inhabitants to their full potential, as seen in China and in India, countries with about the same population as Africa’s.
Ebenezer Onyeagwu, Zenith Bank Group Managing Director/Chief Executive of Zenith Bank, advocated this at the Africa Investment Risk & Compliance Summit 2021 in England.
Impact investing as an investment that yields optimal returns for investors, value for all stakeholders, and guarantees continued sustenance and existence of humanity, he explained in his keynote address on “Leveraging Impact Investment Opportunities for Growth in Africa”.
The summit was organised at the University of Oxford by the Emerging Business Intelligence & Innovation (EBII) Group.
Africa’s financial market shallow
Onyeagwu decried the shallowness of Africa’s financial market highlighted by the fact that no African exchange is among the Morgan Stanley developed markets index, only two African exchanges (Egypt and South Africa) are in the MSCI Emerging Markets Index, and just six African exchanges are in the MSCI Frontier Market Index.
“Although the International Finance Corporation (IFC) estimates that the global investors’ appetite for impact investing could total as much as $26 trillion, only approximately 8% of the assets of impact intent funds are focused on Africa.
“This is not significant enough, and Africa appears to be in the room but not on the table, considering that Africa is in dire need of investment and the continent’s 1.3 billion people represent about 17% of the global population of about 7.8 billion,” he said.
Onyeagwu cited the immense opportunities in Africa that represent enormous investment proposition for discerning investors, including the huge population, large market and active labour force, and the rich natural endowment.
He described Africa as “the new frontier” for global growth.
He made a case for increased impact investment in a continent where investment opportunities cut across agriculture, healthcare, housing, infrastructure, electricity, and the creative sectors.
Paradigm shift
Onyeagwu enthused about the African Continental Free Trade Area (AfCFTA) which would create a single, continent-wide market for goods and services, business and investment and grant investors access to the entire continent.
He called investors’ attention to Africa’s rich natural endowment, which includes 60 per cent of the world’s uncultivated arable land and 9 per cent of the world’s freshwater bodies, a continent that holds enormous potential for organic food production.
He implored investors in the agribusiness value chain to focus attention on Africa for organic food production instead of genetically modified food in other climes.
He also noted that as a socially responsible organisation, Zenith Bank continues to promote impact investment in Africa.
“Zenith Bank has maintained strong advocacy for investment in Africa through its flagship sponsorship of ‘Inside Africa’ on CNN for 16 consecutive years, which is helping to highlight the immense creativity and talent that abound on the continent and the enormous investment opportunities on the continent of Africa.
“The bank leverages its in-depth knowledge of the African market to guide investors and hedge their exposures.
“Zenith Bank has been on a steady Environment, Social and Governance (ESG) investment journey, which started with ESG integration as a business strategy as well as being a signatory to the Nigerian Principles for Sustainable Banking and the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking.
“Zenith Bank received recognition as the ‘Best Company in Promotion of Gender Equality and Women Empowerment in Africa’ at the 2020 Sustainability, Enterprise and Responsibility Awards (SERAS).
In his call to action, Onyeagwu sought a paradigm shift, saying Africa is a work in progress, and leaders in the public and private sector should not despair. He encouraged leaders to champion the changes they want to see, pay close attention to responsibility and accountability in leadership.
He also called for “the de-risking of Africa through reforms, improved ease of doing business, respect for the rule of law and sanctity of contract, and human capital development.”
He expressed satisfaction with the reforms of the Nigeria government, including the Road Infrastructure Tax Credit Scheme (RITC), the establishment of the Rural Electrification Agency’s (REA) Rural Electrification Fund (REF), Infraco Plc, and several other development finance initiatives of the Central Bank of Nigeria (CBN).
He said several African countries, including Ghana, Kenya and Rwanda, are recording massive improvements in the ease of doing business, leveraging digital technology to simplify government processes and deepen the financial system.
He implored Africans to see themselves as brothers and sisters, say no to xenophobia, and speak with one voice and not with discordant tunes – and implored the rest of the world to look at Africa as an investment destination that guarantees optimal returns.
“Africa has profound talent that abounds across the world and contributes to the development of these climes, and this should be reciprocated. Africans [should] imbibe the spirit of UBUNTU – ‘I AM BECAUSE YOU ARE’ since we are all connected in humanity.”
About Zenith Bank
Zenith Bank is Nigeria’s largest and one of Africa’s largest financial institutions by tier-1 capital, with shareholders’ funds in excess of N1.1 trillion ($2.64 billion) as at December 31, 2020.
The bank is a clear leader in the Nigerian financial space, with several firsts in the deployment of innovative products and solutions that ensure convenience, speed and safety of transactions.
EBII Group
The EBII Group is an independent specialist compliance and global risk management consultancy firm offering education and expert consulting services to entities in the West seeking opportunities for diversification and growth in emerging markets and Africa.
It supports African entities and governments with their risk management and compliance requirements and delivers practical and genuine support to firms by providing a comprehensive and relevant assessment of risks, enabling them to successfully navigate their risks and ensure adherence to their compliance requirements.