Africa Impact Group has been identified as a leader in impact investing across the continent, investing in funds, organizations and companies with the intention of generating measurable social and environmental impact along with financial return.
The group goes beyond traditional business goals and financial returns, focusing on pioneering and developing innovative business models to solve pressing social and environmental issues in francophone and sub-Saharan Africa and beyond.
Issam Chleuh founded the group in 2012 when impact investing was still a relatively new and unexplored idea. His projects included developing corporate social responsibility in Congo for the the Dangote Group, owned by Nigerian billionaire Aliko Dangote.
Growing up, Chleuh lived in many countries. He was born in Mali, started his company in the Republic of Congo, and has lived in Ghana, Senegal, Mauritania, Guinea, Benin, Morocco, and the U.S.
Chleuh said the Dangote project had tremendous impact on education and health in the Congo and helped give his investment group visibility in private-sector efforts in Africa’s economic and social development.
In 2014, Forbes Magazine listed Chleuh as one of Africa’s 30 most promising young entrepreneurs. In an interview with AFKInsider, Chleuh talked about some of the keys to his business success and to sustainable development in Africa.
Chleuh: Young Africans between 15 and 25 represent more than 60 percent of Africa’s total population and account for 45 percent of the total labor force. A big number of these youth are unemployed. Indeed, they go to school, graduate from vocational colleges and universities, but have a hard time finding a job. This pushes a lot of them to look at entrepreneurship as an alternative career option. And this makes total sense. Everything has to be done in Africa. Opportunities are endless. Social and environmental issues are more important than ever. It is a very good time to be a young African entrepreneur.
Chleuh: The first challenge is the skills gap among entrepreneurs. In fact, entrepreneurs often lack the skills, education, and access to information needed to turn their entrepreneurial spirit into bankable project ideas. The second challenge is the lack of data on financial and non-financial performance in Africa. Even though there is a big number of entrepreneurs looking for finance, finding opportunities and screening them for “bad deals” is a real challenge. Investors and fund managers rely on their personal networks to identify deals, just as entrepreneurs rely on their networks to identify investors. It is often not possible to gather sufficient information to conduct due diligence prior to making a deal, and the lack of credit bureaus in the region presents a challenge to investors and lenders, as there is no source of comprehensive information on credit histories.
Chleuh: The industries that are the most promising will be in technology (online businesses, app-driven businesses, big data), agriculture, renewable energy, health, education, consumer products, and imported goods. Water, sanitation, and affordable-housing projects hold tremendous potential as well.
Chleuh: I am very optimistic about the current state of Africa as well as the future of the continent. Africa is the last frontier in terms of economic growth. Living conditions are getting better and better over the years. Countries are more stable politically. Progress in health and education has been tremendous. Nevertheless, I see more and more investments and focus in the education and healthcare sectors. The Ebola outbreak is a reminder that building robust healthcare ecosystems should be a high priority sector for Africa.
Chleuh: Africa’s labor market is dysfunctional. In fact, Africa’s employment challenge is to create more stable wage-paying jobs. Indeed, even though the majority of Africa, a 400-million labor force, is working, 63 percent are engaged in various forms of subsistence activities or vulnerable employment. The continent will add 122 million new jobs within the decade to 2020. Accelerating the growth in wage-paying jobs is critical for Africa’s prosperity. Predictable incomes will improve standards of living, health and education budgets of families and boost consumer spending of the growing African middle class. The role of policy makers and business leaders is important to create clear strategies to accelerate private-sector job creation. Industries that hold the most potential for job creation in Africa are (in descending order) agriculture, retail and hospitality, manufacturing, transportation and communication, finance and business services and natural resources and utilities.
Chleuh: Higher taxes could increase sources of revenue for African governments. So, I think it could be a good idea. The challenge will be to ensure that these tax revenues will actually go to address public needs like transportation, education and health, among others. Also, increasing tax rates might discourage foreign direct investments. This is something to keep in mind.
Chleuh: I see AIG as the leading African-owned advisory and investment firm focused on impact investing in Africa. I also see AIG tackling the issue of youth unemployment by catalyzing youth entrepreneurship and innovations.
Chleuh: The best advice is to think global/regional but act local. It is important that an idea be implemented at the local level through a pilot phase. Piloting an idea is very important because it allows you test your concept, and incorporates feedbacks and findings before moving to the next stages of development. Once the pilot is tested and successful, then scaling up can be explored.
Chleuh: The Africa of the future would probably be a mix between Rwanda and Kenya. Kenya symbolizes the revolution in entrepreneurship, innovation and technology currently occurring in Africa, primarily driven by the youth. Rwanda represents the resilience, discipline and vision that Africa needs to strive for.