International Women's Day: Adding Gender to Impact Investment Portfolios

As the world celebrates International Women’s Day this week, it is hard not to think of the progress and remaining challenges facing our global society in achieving gender equality. We have Malala Yousafzai and Hillary Clinton as examples of high-profile women leading their own movements, with the United Nations focusing on all women, with “Achieving gender equality and empowering all women and girls” as their fifth-ranking Sustainable Development Goal (SDG).  And – just as we see with most social issues – the conventional way of approaching positive change, like counting the number of women who show up to a hand-washing training, is not nearly adequate. International investors, who are already exploring innovative ways to solve large-scale environmental, agriculture, energy, and health issues, are also looking at how to bring impact investing to bear towards gender equality.

Most of today’s global investors are not solely interested in pure financial returns. In an era where doing well and doing good are sought together, even investors are looking to use their money to generate social returns alongside financial returns. This is the market of “impact investing,” a sector that is actively seeking market-based solutions to social and environmental problems, instead of the conventional model of simply “do no harm.”

And this impact investment market is growing. Global Impact Investing Network (GIIN) estimates there is currently $60 billion worth of impact investment under management. A recent Impact Investing Australia 2016 Investor Report concluded that its country’s impact investment market is set to grow over the next five years, with 41% of respondents who are active impact investors aiming to triple their impact investment fund allocations over this period. The majority of its respondents who were non-impact investors indicated they were “likely to consider social, environmental, and cultural impacts as metrics” for their investments.

With this growing market, led by heavy-hitters like J.P. Morgan, The Rockefeller Foundation, along with the Ford and Kellogg Foundations, it is natural to explore how impact investing can add to its successes and seamlessly include gender among the array of sought outcomes. For International Women’s Day, Forbes published an article, “5 Easy Ways to Invest in Women – And the World,” citing a GIIN survey where one third of the impact investment respondents already explicitly target gender equality as an impact focus, shown in Figure 57. Veris Wealth Partners, a firm with $800 million in managed impact investments, now sees “gender lens investing” as the most popular of its five impact strategies.

Impact investing is being explored as an innovative way to finance large-scale social protection programs, such as school feeding, increasing economic benefits by improving smallholder farmers’ market access, and supporting agriculture production and better ensuring food security. Within every one of these areas, gender equality is a seamless and natural fit.

Let’s look at Nigeria as one example.  This February, 20 Nigerian women won the African Women in Agriculture Research and Development, leading the pool of winners across eleven African countries. Cassava, according to the United Nations Environmental Programme, is a leading staple crop both in Nigeria and throughout Africa that is traditionally considered a “woman’s crop.” Women do the bulk of the post-planting labor, such as weeding, harvesting, transporting, processing, and marketing. Just last month, the American Association for the Advancement of Science invited Nigeria’s National Root Crops Research Institute to hear Nigeria’s latest advancements that would put cassava on par with the world’s industrial cash crops, and, also benefit women smallholder farmers.

In Haiti, investing in cleaner energy technologies such as cleaner stoves or “green charcoal” not only creates environmental improvements, but also directly benefits health outcomes for women, who are largely responsible for family cooking.  The World Bank estimated that 70% of Haitians were dependent on wood fuel as its primary cooking fuel, which led to extreme indoor air pollution and respiratory infections – a leading cause of Haiti’s ranking as a country with one of the highest rates of tuberculosis in the world.

Let’s combine these problems and look at how impact investors could target specific outcomes that promote gender equality by measuring the impact of the benefits that, for example, a school feeding program offers. These targets could include:

  • Ensuring at least 50% of the smallholder farmers producing for the school feeding program is women.
  • Targeting “women crops,” like cassava, as key parts of school meal menus.
  • Choosing at least 50% women-owned small and mid-sized enterprises to introduce to investors agro-allied transportation and processing companies.
  • Specifically tracking women’s participation in the preparation, cooking, and delivery of the school meals with focused M&E.
  • Investing in and ensuring the use of cleaner technologies for food preparation.

To end with business-sage advice from Forbes, “there’s no shortage of opportunities to make women a part of your investment strategy – with results that will improve lives as well as your investment portfolio.” In the growing impact investment market, gender equality is already rising as an obvious focus for investment portfolios, and those seeking impact investments may do well to include specific gender-focused targets to attract better financing.

Motive International Parleys FiiRO on School Feeding Program

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In order to further consolidate the relationship between the Institute and Motive International – an American company, a team comprising of Ms Morgan Keay-Chief Executive Officer; Miss Jennifer Prillaman- Business Development Executive and Tunji Ladner – the Nigerian Representative visited the Institute on Monday, 25th January, 2016. The team was received by the Director-General/CEO of the Institute, Dr. (Mrs.) G.N Elemo assisted by Dr. Dele Oyeku (Director, Extension & Linkage) and Mr. Patrick Usen, the Chief Executive Officer, Inter-Heritage Promotions Limited, a Consultant to the Institute on R&D commercialization.

The DG/CEO, Dr. (Mrs.) G.N Elemo said she was very glad to receive Ms. Morgan Keay and her team back to the Institute for further discussion on developing a sustainable model for the National School Feeding Programme.

Ms. Morgan Keay reinstated the interest of Motive International as a social enterprise in food and nutrition security and strategic partnership to facilitate commercialization of the Institute’s R&D results most especially in the areas of food and nutrition. She further stated that her company can facilitate the inflow of patience capital to both the private and public sectors in pursuance of the National School Feeding Programme. She said her company is already discussing with the Lagos State Government on School Feeding Programme and has indicated FIIRO as its technical partner for menu formulation and standardization.   

The DG/CEO in her response informed the team that the Institute is always willing to partner with organizations that can add value to its programs. She said the Institute is willing to share in the experiences of Motive International especially on the management aspect of the School Feeding Programme with the aim to develop a sustainable model for the National School Feeding Programme based on best practices all over the world. At the end of the discussion, both organizations renewed their resolute interest to work together for mutual benefit in national interest.  

Via: Federal Institute of Industrial Research at Oshodi:

Friends, not Enemies of the State: Civil Society in Extremist-Affected Nations

“Improving government legitimacy is vital to a just and peaceful Iraq,” Mercy Corps posits in their newly-released “Investing in Iraq’s Peace: How Good Governance Can Diminish Support for Violent Extremism.” The title and the research behind it unsurprisingly affirm what has come to be the prevailing hypothesis in the global Countering Violent Extremism (CVE) discourse: poor governance resulting in marginalization, whether real or perceived, is a key driver of extremism; More so than poverty, religion or ethnicity. Indeed, data collected everywhere from Iraq to Nigeria, Colombia to Afghanistan support this notion. And yet improving governance remains an under-pursued and scarcely funded CVE strategy. Perhaps because improving governance, for many, seems an abstract and onerous objective; and one that extremist-affected states often resist. 

This report, however, suggests an indirect approach to improving governance may be a paradoxically straightforward way of targeting extremism: Invest in civil society, and governance will improve, followed, in turn, by a reduction in extremism.

Most of us quietly root for the grassroots NGOs who are demanding improved transparency in weak states, or for watchdog groups exposing state corruption and human rights abuses in an effort to spark reform. But it comes as no surprise that the governance institutions these civil society actors have in their sights, hardly jump at the chance to invest in or empower them. This report suggests, however, maybe they should be.

Mercy Corps' research in Iraq suggests that as the prominence of civil society groups rise, (For example, those who serve as honest brokers between marginalized groups and government bodies) so too do public perceptions of governance. This demonstrates the correlation between civil society and governance. If, by extension, improvements in governance are correlated with drops in extremist sentiment -- as has been documented in contexts around the globe -- it follows that the strengthening civil society may be an indirect way to counter violent extremism. 

In Nigeria, a state signaling its earnest desire to counter the extremism promulgated by Boko Haram, the government (and donors and businesses and others) may consider enabling and investing in civil society as an important element in CVE campaigns. In Mali, where a strategy entitled “Civil Society for Human Security” was penned by a consortium of local NGOs, the national government (who has already been the target of AQIM and ethnic extremists), may be well-served listening to and integrating critique offered them by their domestic civil society. In fact, across the globe, naturally defensive officials may find that embracing their critics helps them defeat a far more insidious foe.       

The idea that “boosting civil society reduces extremism” remains a vague hypothesis, but Mercy Corps' new research on Iraq, coupled with data from extremist contexts around the world, offer empirical evidence to suggest there is indeed a link. States from the Sahel to the Levant to Latin America to Southeast Asia that each face their own brands of extremism may wish to consider making nice with even the peskiest of NGOs, advocacy groups, or watchdogs. Doing so may spare those governments from a far worse enemy of the state.

Paying for Lunch: How Nigeria can Finance its Multi-Billion Naira School Feeding Initiative and Why it's a Worthy Investment

              Photo from Mail & Guardian Flickr

              Photo from Mail & Guardian Flickr

Nigerian President Muhammadu Buhari’s promised school feeding program, which seeks to provide one meal a day to all of the nation's primary school children, will require tens of billions of naira annually (USD billions) to cover costs of food, distribution, and administration. The investment is a worthy one, with returns expected in the form of social dividends and much-needed private sector growth fueled by government spending. In fact, according to the World Food Program, countries that implement school feeding enjoy a 1:4 cost/benefit ratio on average, thanks to increased productivity, asset generation, and higher wages associated with educational benefits. Returns notwithstanding, few countries possess the resources to fund a national school feeding initiative outright, and Nigeria is no exception. And while many countries implement school feeding with substantial donor support, Nigeria's receipts of Official Development Assistance (ODA) are modest. This compels the Federal Government (FG) and states to get creative about how it will pay for lunch – more accurately, 20-30 million lunches – each day.

4:1 Benefit to Cost Ratio of School Feeding Programs, Globally

Vice President Osinbajo, who’s been tapped to lead the initiative for the FG, estimates the national school feeding agenda will attract 980 billion naira (USD $5 billion) in private investment. While critical, most of this will go to businesses on the supply-side of the program, begging the question: “Where will FG and state procuring agencies find the money to buy goods and services for school meals?” On top of food and distribution, there’s the cost of administration, which averages 20-30% of the total that governments must spend to make school feeding programs run, according to global case studies.

Nigeria’s FG is likely to finalize its 6 trillion naira budget for FY16 this month with an estimated 500 billion naira (USD $2.5 billion) allocated for social welfare, from which the school feeding initiative must draw. States, particularly those selected as pilot school feeding states for 2016, must also budget for their share of the tab. But with falling oil prices, slowed growth, and past losses from abuse and theft of public funds, government coffers will undoubtedly come up short. At the same time, development finance institutions like the African Development Bank and the World Bank will expect to see how the FG and states are optimizing their own and other sources of capital before issuing new loans for this agenda.

All this is to say that the bill for school feeding is steep and finding the money for it will not be easy, but it is possible and very much worth the effort. What’s needed is a bespoke public financing strategy, synchronized at the FG and state levels, which optimizes cash-on-hand, capital-on-credit, public and private resources, with conventional and innovative models. Motive International believes the following four-pronged strategy may be just the solution:

  • One:        States and the FG should establish public-private partnerships (PPPs) and encourage private sector investment and lending into value chains aligned to school feeding goods and services. Smart capital injections in the right places will lower overall costs of school feeding, thereby reducing the total financing burden. Fortuitously, Nigeria’s own Bankers’ Committee announced this week their goal of issuing 300 billion naira (USD $1.5 billion) in loans to agricultural small and mid-sized enterprises (SMEs) in 2016. This pledge of capital is welcome and needed. 
  • Two:        The FG and states should harness new streams of revenue tied directly to the economic growth that school feeding will help fuel. Domestically mobilized resources are the most vital yet currently under-tapped source of capital for such initiatives, a sentiment wisely touted by leaders such as Lagos State Governor Akinwunmi Ambode. Government needs to collect more revenue – especially from non-oil sectors – to pay for essential public goods and for the next two elements listed below.
  • Three:      States and the FG should leverage innovative instruments such as impact bonds, which tap into private capital markets by linking school feeding targets to future returns on investment. If successful and brought to scale, Nigeria could be a global pioneer in the impact bond space, using school feeding as a springboard. Lagos State, with strong fiscal health and dynamic leadership, make it an ideal state to embrace such innovation.
  • Four:        States should apply for, and the Federal Ministry of Finance should support, carefully structured development bank loans to finance discreet elements of the program. A clear implementation plan that defines FG and state roles and responsibilities in school feeding must precede any loan application.

With just nine months before the start of the 2016 school year, and in the midst of budget season, the time for fleshing out and executing a financing strategy for school feeding is now. Fortunately, Nigeria can capitalize on the current rise in global investor interest in the country, thanks to the Administration’s promise of a less corrupt political economy, and seize the current window to engage prospective impact bond and PPP backers. It can also take advantage of new findings emergent from the July 2015 Financing for Development conference in Addis Ababa, and the broader momentum of the Sustainable Development Goal (SDG) agenda, when engaging development banks and the private sector alike. This timely moment, coupled with Nigeria’s market sophistication, under-tapped tax base, and political resolve around school feeding, provides every opportunity for the FG and states to mobilize funds for this pricey, but transformative, agenda, and smartly pick up the tab for lunch.

Better Odds than ISIS: Defeating Boko Haram, the World’s #1 Deadliest Terrorist Group

Northeastern Borno State is the epicenter of 23,402 deaths since May 2011. Map from the Council on Foreign Relations Africa Program's Nigeria Security Tracker.

Northeastern Borno State is the epicenter of 23,402 deaths since May 2011. Map from the Council on Foreign Relations Africa Program's Nigeria Security Tracker.

This week marked a sad, newsworthy occasion for Africa watchers. The 2015 Global Terrorism Index (GTI) was released, identifying Boko Haram, Nigeria’s notorious extremist insurgent group, as the #1 deadliest terrorist group on the planet. Surprising many, Boko Haram surpassed ISIS in the number of fatalities for which it was responsible (6,644 deaths vs. 6,073 deaths). The rankings also earned Nigeria the tragic distinction of leading the world for the largest increase in terrorist incidence of any country on earth, with a 317% rise. While the GTI rankings do little for the reputation of a country Motive International holds in the highest regard, we view this report as an opportunity. This is a moment to draw attention to a country and crisis that have been underestimated for too long, but where every opportunity exists to turn things around.

Boko Haram became a household name in 2014 thanks to the #BringBackOurGirls campaign, yet few realize just how lethal the group is, and rarely is the scale, scope, and nuance of the crisis system in which they operate adequately portrayed. In their 6-year insurgency, Boko Haram has claimed tens of thousands of lives, and spurred one of the largest conflict-fueled migrations of internally displaced persons (IDPs) and refugees on earth, estimated at over 3 million people. Operating, recruiting, and wreaking havoc not only in Nigeria, but neighboring Niger, Chad, and Cameroon, Boko Haram is responsible for billions in economic losses, heightened food insecurity due to massive disruptions in production, and spiraling grievances among citizens. Having pledged allegiance to ISIS earlier this year, Boko Haram is the African franchise of a globally syndicated brand of terrorism that knows no borders. If Paris showed us why we need to pay attention to what happens in places like Raqqa and Mosul, Boko Haram demands that we turn our attention to cities like Maiduguri and Diffa.

A June 2015 meeting of Lake Chad Basin Commission Executive Secretary with leaders from Benin, Nigeria, Niger, Chad, and Cameroon. Photo from Vanguard.

A June 2015 meeting of Lake Chad Basin Commission Executive Secretary with leaders from Benin, Nigeria, Niger, Chad, and Cameroon. Photo from Vanguard.

The good news is, awaiting us in Boko Haram's turf, are far better options and partners than in the region ISIS calls home. Nigeria is not a failing or rogue state, nor is it in the midst of widespread civil war as is true for Syria and Iraq. Contrary to what Western headlines portray, Nigeria boasts stable security throughout the vast majority of its territory, and remains a thriving economic, political, and cultural powerhouse. Not always credited for the vibrancy and stability of its institutions, Nigeria is home to a highly sophisticated business and civil society sector, and a free and dynamic media. Its capable government and military institutions, while imperfect, are undergoing a renaissance thanks to President Buhari’s merciless anti-corruption efforts, and a national agenda driven by accountability and fair deals for citizens.

At the regional level, 60+ year old international organizations like the Lake Chad Basin Commission (LCBC) -- recognized as the umbrella organization for the African Union and UN-backed Multi-National Joint Task Force (MNJTF) -- provide platforms for cross-border, civil-military, socio-economic, and political problem solving. Such homegrown institutions in the region, which have persisted against the odds with little outside funding and tricky bi-lateral dynamics,  present tremendous opportunities for partnership and meaningful, collective action.   

These are all reasons why Motive has chosen to engage Nigerian and regional influencers, including Nigeria’s Ministry of Defence and the LCBC. We are hopeful that with such partners -- and hopefully new friends alarmed by the GTI ranking -- we can cultivate durable peace and stability in a country and region currently terrorized by the deadliest group on earth. Motive’s system-based not symptoms-based approach seeks to mobilize a whole-of-society campaign aimed not just at defeating Boko Haram, but shifting the vicious cycles that allow crisis to perpetuate. This campaign for durable peace and stability will take a village -- which is why we invite governments, civil society, security forces, and the private sector to join us. It's high time we start investing the human, social, political, and financial capital this crisis warrants. The good news is, doing so in this region offers the prospect of achieving faster, more significant results with far less compared to regions the #2 deadliest group, ISIS, calls home. 

As Africa’s most populous nation, and its largest economy, Nigeria should be at the top of many lists. But not the Global Terrorism Index! Join Motive International in our campaign to knock Boko Haram off the list in 2016 (#BHOffTheList), and bring peace and stability to a region that deserves, and is getting a bittersweet boost in our collective attention this week.