Africa must build an inclusive ecosystem to strengthen its social impact environment

I was recently involved in a colloquium organized by B Lab East Africa and transformational Business Network which took place at the Kenya School of Monetary Studies. The workshop was aimed at trying to explore challenges and opportunities in the social impact environment in Kenya and Africa at large.

For those of you who are not familiar with social enterprises; these are organizations that are for profit but modeled to have significant positive impact on the environment and surrounding community.

Social impact investment is the more sustainable approach to development in Africa as compared to the aid model which heavily relies on donor funding. Why social impact investment is sustainable is because impact investors who include foundations, pension funds, governments do not give money for free as with grants given by donors; they actually expect a return albeit lower than market rate.

Social enterprises in Africa identify themselves in various ways such as Value based businesses, Impact enterprises, purpose driven, and responsible businesses among others. Further the enactment of the company Act 2015 which doesn’t restrict any object not unless it goes against the constitution has opened up an opportunity for more organizations to join the social impact space since most of them are limited liability companies.

The role that social enterprises play in the continent cannot be over stated. Organizations such as Mkopa in Kenya have given access to home lighting/ rural electrification a new meaning.

It is evident social impact is a great tool for transforming Africa and requires all stakeholder to make deliberate steps in improving the ecosystem. Government must for instance provide tax breaks to companies to ensure that they give more employment opportunities to the bulging and educated youth, Institutions of higher learning such as universities must support social enterprise by conducting relevant  research on new products, high net worth individuals must step in as angel investors and provide the necessary risky fund needed by emerging companies to enable them grow without debt to a point they can attract bigger investors such as private equity funds and venture capitalist.