The government has been advised to invest pension funds in sectors that have direct impacts on the citizens to support economic development.
This was conveyed at the National Advisory Board for Impact Investing (NABII) sixth yearly report ‘Investing for Impact in Nigeria’ launched in Lagos.
The report provided recommendations for investing in micro, small and medium-scale enterprises (MSMEs) and women-owned businesses and how to unlock pension funds to mobilise capital to drive growth in key sectors.
The study was by the Nigerian Economic Summit Group (NESG) and NABII and supported by the Global Steering Group for Impact Investment (GSG), OTT Impact and funded by the International Development Research Centre (IDRC).
It noted that most impact investment in Nigeria comes from international investors.
“These deals are often limited compared to the demand while local investors perceive that these investments do not translate into financial returns,” it stated.
The study also provides valuable insights into investing for impact with policy recommendations for unlocking the potential of the agriculture, education and health sectors.
“This report is an essential step toward understanding the enabling conditions for unlocking investment for impact in key sectors and the Impact Investors Foundation and its partners are committed to improving the awareness, stakeholders’ acceptance and development of enterprises for impact funds,” said Chief Executive Officer of NABII, Etemore Glover.
She added that the report sets out the required policies, interventions and collaboration among key stakeholders that can take the impact investing market in Nigeria to the next level.
The report said that agriculture (with $799.8 million), financial services ($729.69 million), and energy sectors ($372.71 million) have been the most consistent destinations of impact investment for development finance institutions over the past five years, while deployment into education and health sectors have halted since 2018.
