Analysis: Development Finance Institutions Are Looking to Africa’s Digital Frontier for Impact and Returns
On the about page of the UK government’s overseas investment arm, the CDC Group declares its goal to be “do good without losing money”. That may well be the universal motto of its counterparts like Proparco, the US International Development Finance Corporation (DFC) or any of the many institutions that recently jointly committed to investing $80 billion in African businesses over the next 5 years.
In theory, these “Impact-first” funds typically focus on how to move the development needle when they invest. This is even more true in Africa, where both development and the capital it needs are sorely lacking. However, what is arguably more important than how much capital is available is how the capital is allocated. Now that development finance institutions (DFIs), which represent the bulk of available capital in Africa, are looking to technology startups to support development goals and find returns, players in that ecosystem, and Africa in general, need to step up the thinking and conversations that should shape the future of Africa’s digital economy.
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