Financing sustainability: A trend analysis of impact fund allocation in East Africa

Abstract

The East African region has become a thriving market for investment with increasing inflows of private capital within Sub-Saharan Africa. Despite this regional progress, East African countries are still characterised by social exclusion and poverty, translating into a common need for impact funds. Notably, the amount of impact funds deployed in the region is nonhomogeneous, as their allocation tends to occur on more mature markets such as Kenya’s, Uganda’s, Tanzania’s, and Ethiopia’s, while countries with relatively lower levels of social inclusion such as Burundi, Somalia, and South Sudan are left behind. This article focuses on the potential of impact investment in financially sustainable projects and activities that seek to generate positive social and environmental value alongside financial returns and, therefore, investigates the existence of trends in the allocation of impact funds to various countries and projects in East Africa.