The Federal Government on Thursday inaugurated Finance Committee for the Wholesaler Impact Investment Fund charged with the responsibility of raising $100billion to sustainably close the gaps in financing the Micro Small and Medium Enterprises in Nigeria through impact investing.
Prince Clem Agba, Minister of State for Budget and National Planning, who inaugurated the committee in Abuja, explained that the concept of Impact Investment has evolved in various climes, as a sound approach in leveraging private investments for jobs and wealth creation, balancing inequities and fostering long-term structural change through financing of Micro, Small and Medium Scale Enterprises(MSMEs).
He implored the committee to unlock local private investments using capital from public sources and to delve into strategies for attracting investments from Development Finance Institutions (DIFs) into the impact investing ecosystem.
He said: “In outlining strategies for achieving development aspirations, the National Development Plan 2021 – 2025 has clearly identified opportunities for mainstreaming the concept for productivity in various areas of the economy for improved activities through impact investing in upscaling renewable energy capacities, utilization of our natural resources for import substitution and enhanced foreign exchange earnings, building a circular economy, improving the bio-economy, as well as, strengthening preparedness and responsiveness to disaster management across the geo-political regions.
“It is worthy of note that the capital deployed for impact investing in Nigeria considerably increased by 147% from $1.9 billion in 2015 to $4.7 billion in 2019 before a decline to $2.7 billion in 2021.This decline is attributable to economic shocks related to the COVID-19 pandemic. Considering the potentials for returns and positive public benefits, the Government will continue to support the private sector and realign the current extant regime for robust impact investing in the country.
“As an aftermath of the recent launch of the Design for the Wholesale Impact Investment Fund, the Nigerian Advisory Board for Impact Investing and members of the Nigerian Competitiveness Support Programme (NICOP) have appointed me as the Official Champion of the viable Wholesale Impact Investment Fund in Nigeria.
“This is a challenge which calls for the Government collaborating with the private sector and international development partners for adequate implementation. In this regard, a Wholesale Impact Investment Fund is conceived to raise about $100 billion to sustainably cover the gaps in financing our MSMEs through impact investing.”
The minister further explained that the key mandate of the Finance Committee which is specifically to secure government’s commitment and contribution to the initial seed capital of the proposed Fund and provide guidance to the Nigerian Advisory Board for Impact Investing on engagements with the government.
He stated that the Committee was expected “to unlock local private investments using capital from public sources and to delve into strategies for attracting investments from Development Finance Institutions (DIFs) into the impact investing ecosystem.”
He pointed out that the Committee which has till December 2023 to complete its assignment has the following Terms of Reference which include to “Review the proposed framework and recommendations of the Wholesale Impact Investment Fund;Provide guidance and facilitate the Government’s consent/commitment to contribute up to 90% of the seed capital of the fund, i.e N100 billion;Identify other relevant MDAs to join the Committee and Lead Government engagement on the Fund.
He further stated that the membership of the Committee is drawn from relevant Ministries, Departments and Agencies as well as the Nigerian Advisory Board for Impact Investing under the Chairmanship of the Permanent Secretary, Federal Ministry of Finance, while the National Planning Arm of the Ministry will serve as the Secretariat.
Also speaking, Mrs. Toyin Sanni, Chairperson, National Advisory Board for Impact Investing, lauded the initiative.
Sanni said it is an important solution for closing gaps in financing MSMEs in Nigeria, as it would benefit those at the bottom of the pyramid in MSMEs sub-sector.
She expressed optimism that the partnership with government would make a big difference in the sector.
Responding, Chairman of the Finance Committee for the Wholesaler Impact Investment Fund, Aliyu Ahmed, pledged that the committee would work assiduously in realising the objectives for setting up the Committee.