Africa will soon be home to the largest workforce in the world. Vast numbers of people will live and work in urban settlements that don’t yet exist. They will need housing, food, water, energy, health care, education and community. Yet with woefully inadequate infrastructure today, Africa will have to turn to a more inclusive economic development and growth model.
The Sustainable Development Goals were designed in part to address the needs of these people and people like them around the world. However, with little substantive movement in achieving the SDGs since ratification in 2015, the capital gap required to meet these goals has widened into the trillions. In Africa alone, the gap is estimated at more than a $trillion per year.
The challenges in transforming economic models run deep. Public funds currently contribute less than 1% of the projected capital required to achieve the sustainable development goals, while private capital remains at a loss as to how to address the 2030 goals in a manner consistent with traditional investment dynamics, behaviours and biases that drive private allocation.
Optimizing an investment portfolio to balance risk tolerances and return expectations with measurable inclusive and sustainable outcomes is a perspective shift rather than a paradigm shift
17Africa integrates an inverted portfolio construction methodology that introduces SDG value chains and allows for non-financial expectations to be more fully assessed & targeted, rather than treated as by-products of a solely returns driven portfolio
A market level set of autonomous enterprises whose products or services contribute individually and in aggregate to a transition pathway that enables the achievement of one of more SDGs
Identifying an SDG value chain of enterprises across the capital pool enables an investor to target a depth of inclusion and sustainability without compromising return expectations or risk parameters.