Dr. Amy Jadesimi, Managing Director and CEO of LADOL
Please give us a bit of background on yourself, and how your organization plays a leadership role in the impact investing space.
LADOL is a Nigerian company that is developing the first and largest industrial free zone in Nigeria. The development has so far attracted $500 million of investment, which has turned a disused swamp inside Apapa Port (the busiest Port in West Africa) into a modern and sustainable industrial free zone. Our development is a strategic investment because for every 1 job created in the zone 5 to 10 are created outside it.
A little about me – I trained as a medical doctor at Oxford University before moving into investment banking with Goldman Sachs. My experience in banking inspired me to pursue a MBA at Stanford Graduate School of Business before moving back to Nigeria to join LADOL.
How well are companies adapting to the mainstreaming of purpose-driven finance? What ways is impact investing making headway, and where is it lagging?
In Nigeria, there has always been a clear correlation between companies that implement purpose-driven, value adding business models and those that achieve major success. Up until the last 5 to 10 years, the vast majority of local investment was by and for the government. The real private sector was practically non-existent and often squeezed out by government or quasi-government projects (which were and are regularly backed by international DFIs). As is the case across the world, government funding is often not adding value and the purpose is often not as advertised. This historical status quo contrasts starkly with the rapid and exponential market impact that purpose-driven finance, into / by the real private sector, has had in Nigeria. From mobile money companies, such as Pagatech, to large Nigerian investors in power and downstream oil and gas – it is clear that the Nigerian private sector has embraced impact investing as a way to grow the local market and their bottom line. Despite these successes, impact investing is being held back in Nigeria by lack of long-term capital - particularly from DFIs - who still divert funds through the government, government nominated companies or multinationals – all of whom have a very poor track record of matching investment to market growth and sustainability in Nigeria.
Nigerians need to do more, particularly those of us in the real private sector. We need to highlight the success stories – particularly SMEs - and we need to lobby internationally to ensure funding goes into the right hands - so that more entrepreneurs in established as well as emerging markets are inspired to seize the opportunities in front of them for sustainable, mutual prosperity.
What challenges do you see for the future of purpose-driven finance?
Time is the biggest challenge. The longer it takes for international finance to switch from low growth, high income countries to high growth countries and the longer it takes for investors to focus on real, transparent, value adding, easily trackable private sector companies, the greater the risk that the world economy will continue to slide in the wrong direction. This will lead to a long cycle of global instability. The SDGs have until 2030 and although the narratives around global investing are changing, there has been very little action so far. It’s imperative that leaders in the private sector immediately recognize the existential nature of the current global situation – companies that do not adopt sustainability will fail by 2030.
On the other hand, there is cause for optimism, as there is now a wealth of data available that clearly shows that ROIs for impact investing can be high – we can even define the markets and the conditions that are most successful for different sectors. There is also a clear recognition that change is necessary – making it easy for business leaders to pursue innovative new strategies. The rewards will not come in hundreds of thousands but in trillions of dollars, an unparalleled market opportunity. The time to grab it is now.
What will you be discussing at The Economist's Impact Investing event in New York on February 15?
The main point I want to get across during this event is the importance of private sector leadership. The SDGs are achievable, but to make them the global standard, it absolutely demands the leadership of the private sector. It’s a win-win situation because this will also drive up profitability.
To learn more about the Impact Investing event, click here.