Opportunities and impact for Institutional investors
The Case for Investing in Africa
African Infrastructure as an attractive underfinanced asset class
Mercer, in collaboration with MiDA Advisors and Standard Bank Group have joined forces to publish the second edition of the Mercer report publication titled “Infrastructure financing in sub-Saharan Africa” to present the attractive case for investing in Africa. The publication includes key positive characteristics that build on the compelling investment case as well as key barriers that impacting emerging market economies in Africa where the infrastructure financing gap is particularly wide.
The African continent has been growing at a steady pace in recent years as its economies diversify and continuing to prove resilient in the face of Covid-19. The very large scale of Africa’s unmet infrastructure needs provides a compelling opportunity to create shared value for all stakeholder groups, including global and local investors, local businesses, and the communities they serve. Impact investing as an investment strategy has a growing focus evidenced by the side of the impact investing market which has grown from just US$60 billion in 2014 to US$715 billion in 2019 of which 59% is directed to emerging markets and 21% directed specifically to the sub-Saharan region.
Global institutional investors are seen as a great source of financing for public infrastructure in Africa. They hold a major portion of the world’s savings and have the long-term investment horizon needed for financing infrastructure. At the same time, most governments today are facing increasing budgetary pressures that make it difficult for them to meet the public’s needs for additional public infrastructure investing. Thus, there is great interest in having institutional investors help fill this infrastructure investment gap.