Event: Stakeholder Validation Workshop for Technical Report on Investing for Impact in Nigeria: A Deep Dive into Agriculture, Education, and Health Sectors

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Posted Wed, May 3, 2023 3:03 PM

Timeframe: Tue, May 9, 2023 10:00 AM - Tue, May 9, 2023 2:00 AM

The Nigerian economy has experienced an inter-play of a high growth era and two (2) episodes of economic recession within the last ten (10) years, from 2013 to 2022. In 2014, Nigeria recorded a high real GDP growth of 6.3 percent, while it experienced significant growth challenges between 2015 and 2020. In 2016, the country's real GDP contracted by 1.6 percent, induced by the global oil price crash, and in 2020, by 1.9 percent due to the COVID-19 pandemic-induced economic crisis. In 2021, the economy recorded a robust recovery momentum with a real GDP growth rate of 3.4 percent. The

recovery momentum was strengthened by growth in key sectors such as Agriculture, Manufacturing, and ICT. However, the social impact of economic growth remains low as socio-economic indicators have worsened over the years, especially among women and youths.

The current macroeconomic environment and the need to increase investments and inclusive economic growth make a valuable case for supporting impact investment inflows that will result in social and financial returns. While the impact investing market has grown significantly in Nigeria over the past decade, it is still nascent and evolving. The associated impact capital or projects were still largely focused on the ICT and Energy sectors, the benefit of which could still evade social impact in Nigeria, especially among women. Hence, the Nigerian National Advisory Board for Impact Investing (NABII) in partnership with the Nigerian Economic Summit Group launched a research project seeking to assess and conduct a deep dive assessment of the Impact Investing market towards unlocking the country's massive Impact Investing potential, prioritising Agriculture, Education, and Health as the priority sectors, with gender and sustainability as the cross-cutting guiding principles. These sectors’ performance and importance in driving positive development outcomes in Nigeria are also highlighted by the Nigerian government's priorities, as outlined in the National Development Plan (NDP) 2021-2025 and Nigeria’s Agenda 2050.

The research project provides a detailed landscape of the Nigerian Micro, Small and Medium Enterprises (MSMEs) ecosystem and impact investing market, with a strategic focus on three (3) priority sectors: Agriculture, Education, and Health. It intends to bridge the data and information gap and make available information that will inform investment decisions, especially as women-led businesses are underrepresented. It also identifies regulatory restrictions that can be addressed via policy to free up institutional capital for impact investing in the priority sectors. Aside from extensive desk review, insights from MSMEs and critical stakeholders were aggregated through a survey of MSMEs and Key Informant Interviews (KIIs).

In addition, there has been gender imbalance across several indicators within the MSMEs and access to finance space. According to SMEDAN, 86.4 percent of SMEs are male-led, leaving just 13.6 percent of businesses under the management of female owners. Moreover, the survey analysis from this research project revealed that only 3 percent of female-led firms are aware of Impact Investing products in Nigeria, compared with 21 percent among male-led firms. As such, a cross-cutting theme of gender-based analysis was highlighted in the research project.

Hence, this validation session seeks to bring together key stakeholders in the impact investment space to curate expert opinions on developing the Impact Investing market in Nigeria in an inclusive and gender-balanced manner.

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