Emily Darko

A Busy Week in Nairobi: A week full of events on the African social enterprise scene

Nairobi was the place to be on the African social enterprise scene last week. With a wide range of meetings, conferences and workshops taking place, there is palpable excitement about the potential for innovative social solutions to tackle intractable development problems on the continent in inclusive and sustainable ways.

On Tuesday, Feb. 11, the Overseas Development Institue (ODI) and its partners (KCA Business School in Nairobi, the East African Social Enterprise Network and UCT Graduate Business School, South Africa) convened a workshop to discuss obstacles and challenges facing agriculture and health-related social enterprise in Kenya.

Wednesday and Thursday saw the first Africa Sankalp Forum. Sankalp is a platform bringing together social entrepreneurs and investors, as well as governments, donors, support organizations and knowledge brokers to explore how to catalyze systemic change through market-based approaches.

Then on Friday, I attended the Aspen Network of Development Entrepreneurs’ (ANDE) Africa Conference, where we talked about Africa-India collaboration, access to talent and ANDE’s research program on incubators. Then I dashed (or, more accurately, crawled painfully through pollution and traffic) across town to Strathmore Business School to hear the final session of a day-long discussion about their forthcoming Rockefeller Foundation-funded research on policy issues for impact investing in Kenya. Government representatives spoke about how government policy – and implementation – could be improved.

In our Tuesday workshop, we discussed themes emerging from interviews with social enterprises and support organizations conducted in November (an ODI report on this is also due to be published in April). Many of the same issues arose during panels and conversations at Sankalp, ANDE and Strathmore. I can’t do justice here to all the diverse and informed discussions which took place; however, here are a couple of thoughts from what I heard.

A few common questions arose: Is there a social enterprise community in Kenya? Should there be one? While there is no formal and widely-recognized social enterprise body, a community exists informally in Kenya. Social enterprise founders socialize regularly. For instance, One Acre Fund’s monthly social enterprise happy hour brings together a predominantly expat social enterprise crowd. And tech incubator spaces like i-hub and NaiLab draw local entrepreneurs who meet and share best practices.

Yet some people suggested that donors mustn’t try to convene social enterprises as they do NGOs, since businesses don’t want to collaborate closely for fear of sharing business secrets. However, social enterprises face common constraints in terms of accessing appropriate finance, navigating government regulation and working in challenging operating environments – so there is some scope for support here.

The social enterprise definition issue also came up. The interesting question seems to be not how social enterprise is defined externally, but what social enterprise means in the Kenyan or African context. And what are the circumstances in which establishing a definition brings value – eg: is it helpful for funding, to establish a legal status or for research? Following from this, how can attention be productively focused on impact – as an end, instead of the means to an end?

The role of government was featured in discussions at our Tuesday workshop – and particularly at Strathmore on Friday, when an engaged panel took on direct challenges to how government is performing, and spoke of the need for the community within and beyond government to focus on implementation rather than policy for leadership.

A pre-meeting at Sankalp on the role of donors and DFIs raised issues that included the lack of strategy for social investment across governments, and the difficulty in identifying actors within agencies, as activities tend to be disparate (a forthcoming paper from ODI will look at this issue in more depth). The group discussed solutions, including: market-building for SMEs to overcome lack of absorption capacity for impact investing funds; distinguishing clearly between the fundraising and investing activities of funds; the need to strengthen policy engagement to allow government to engage in execution, not just high-level commitment; and financing issues – creating innovative instruments, but also recognizing resistance among social enterprises to having their business ideas controlled by equity-like investment or over-stringent impact reporting.

Two more issues came up. At ANDE’s conference, a panel discussed how recruiting and retaining top talent in a global market requires providing more than financial return for their work. Employers must also offer social impact, challenge and a collaborative and supportive working environment. Discussions also covered the challenges of acquiring financial and non-financial support. Issues for most young social enterprises include lack of seed funding, the need for business development support, working capital and missing middle funding for expansion. There seems to be lots of ready capital and willing support, but perhaps not enough to meet demand; however, not all demand comes from viable enterprises. Could more be done to bring interested parties together? Do we need more knowledge brokering and expectation managing?

There is still a lot of hype around social enterprise and impact investing. As one panelist labelled it, “early celebration-itis” often surrounds good early-stage ideas that have yet to prove themselves. But what seems clear after last week in Nairobi is the huge potential and willingness for this space to grow and deliver.

Emily Darko is a research officer in the Private Sector and Markets program at the Overseas Development Institute in London.

Social Enterprise
Base of the Pyramid, poverty alleviation, social enterprise