Giving Compass' Take:

• Mark Suzman examines the gap in investment for Africa's critical development goals and how it is a lucrative investment for the private sector.

• How can funders help to support businesses that advance Africa's development goals? 

• Learn about getting started on impact investing.

$2.5 trillion is the amount of money we need to find every year to ensure the world meets the ambitious sustainable development goals to end global poverty, hunger and inequality.

This figure comes from the UN Conference on Trade and Development (Unctad), which estimated that achieving the sustainable development goals by 2030 would require a $3.9-trillion investment in developing countries each year. But with annual investments totalling $1.4-trillion, there is a $2.5-trillion gap — and $600bn of that unmet need is in Africa.

The public sector, donors and philanthropists obviously have a big role to play in closing this financing gap. But so does the private sector. Investment in the sustainable development goals is a huge opportunity for business, one that could open up $1.1-trillion in market opportunities in Africa alone.

We should encourage more financial investment into human capital, because these are the investments — especially in health and education — that provide the biggest effects on a country’s development. That is why we support the World Bank’s human capital project, which highlights the importance of investing in the health and education of a country’s next generation of workers.

The Gates Foundation’s strategic investment fund works like an equity fund, investing in companies to harness the power of private enterprise to create change for those who need it most. In 2017 we invested in Hester Biosciences Africa to construct an animal vaccine manufacturing facility near Dares Salaam in Tanzania. Leveraging a $12m loan from the foundation, alongside Hester Africa’s own equity, the company is creating low-cost vaccines that particularly benefit smallholder farmers in Africa.

But we must do more, especially if we want to realize the continent’s potential; we must invest in the health and education — or “human capital” — of its youth. These investments make development and business sense.

Read the full article about how investing in critical development goals is a huge business opportunity by Mark Suzman at BusinessLive.