By Yemi Lalude

They are at the mercy of the weather and pests. The price they get for their crops varies greatly and is outside their control. But imagine how difficult it is to survive these ups and downs without the safety net that access to financial services provides.

That was the plight of Babangida, a smallholder in Nigeria’s Borno state. Like over half of all adult Nigerians, he had no bank account. So, in 2017, after bad weather and political instability lost him two planting and harvesting seasons, he was struggling to feed his family and buy seeds for the future. 

Help for Babangida came from Tingg Neighborhood Bankers Service (NBS). Its mobile wallet makes it easy to make deposits and withdrawals, save for the future and transfer money. It also opens the door for business loans and, crucially for farmers, allows them direct access to subsidies to buy seed and fertiliser.

The payments platform which underpins NBS was developed by Cellulant, one of the continent’s most innovative companies. Launched in 2004 by Bolaji Akinboro and Ken Njoroge in Kenya and Nigeria, it now operates successfully in 11 African markets, helping tackle financial exclusion – one of the biggest barriers to spreading prosperity.

Over the last 15 years, Cellulant has helped transform the lives of millions of people and, in turn, their communities. It is exactly the kind of business which needs to be supported and replicated if Africa is to meet the needs of a population set to double within the next 30 years.

Look, for example, at Nigeria itself. Its population has already increased from 95 million in 1990 to 201 million this year. By 2050, it will have reached over 400 million as Nigeria passes the USA as the world’s third most populous country.

This demographic dividend, which can be seen right across Africa, should be a huge opportunity. No other region has so many young people entering the labour market. With the right support, their energy and entrepreneurial talent – qualities seen on every street – can spread prosperity right across the continent as well as providing a much-needed engine for the world economy as a whole.

But if this ambition is to be met, we have to find new ways of backing good ideas and supporting companies with the potential to scale up and, like Cellulant, make a positive difference to society as they grow. At the moment, the market is not meeting their needs and we are all losing. Although global private capital markets control more than $200 trillion in assets, less than 1% is committed to driving a measurable and sustainable impact.

 Nor is it a binary choice between making a positive impact on communities and making a financial return on your investment. There are many thousands of social innovators, entrepreneurs and businesses across the continent that are genuinely investable from both a commercial and impact-led perspective. Cellulant is by no means unique in what it has achieved, its ambitions for the future or in the initial difficulty it had in getting funding to grow.

What was also important to Cellulant’s rapid expansion was not just that Bolaji and Ken received the funding they needed to put their plans into action. It was also that their investors, while bringing their own global expertise and experience to the table, signed up enthusiastically to the founders’ vision and were ready to adapt their ideas and approach to African realities. It is genuine partnerships, not just increased funding, which are needed.

The $6.7trn opportunity

With annual spending by African consumers and businesses expected to reach $6.7 trillion by 2030, spurring consumption across a range of sectors where Africans have unmet needs, the opportunities are huge. Identifying them needs the right networks, research and experience as well as rigorous measurement to ensure goals are met. But above all, it needs commitment from as wide a group as possible to harness Africa’s tremendous entrepreneurial spirit.

This week’s World Economic Forum on Africa is an important platform to help build this movement. Advancing the success of impact investing in Africa so we can together create the conditions for inclusive growth and shared prosperity should be a collective priority for those meeting in Cape Town.

As a younger and more socially conscious generation comes into power, the momentum behind impact investing is growing. Done well, it will be truly transformational for millions more Africans, just like Babangida. And an Africa where prosperity is both spread far more widely and sustainable is good for all of us.