Impact Investing and the Power Sector in Ghana
By Godfred Amewu
Despite the positive economic news and encouraging trends that have emerged from Ghana over the past decade, the troubling reality remains that the everyday livelihoods of Ghanaians have not kept pace with macroeconomic growth, and per capita GDP persistently lag behind the rest of the world. There is diverse school of thought deeply explaining why the livelihoods of Ghanaians are not keeping pace with the impressing economics figures quoted over the years. We submit that Impact Investing can address the stubborn income gap because it is vibrant and robust enough to promote sustained economic growth and generate long-term, ...view middle of the document...
It does not work in the same way as socially responsible investing, which excludes areas a person does not want to invest in — like tobacco or guns — through a simple screening process. Impact investing focuses more on bringing about change — helping the working poor in Ghana buy a home, for instance. While most of the money is going into areas like helping to reduce poverty and improving the climate, it is not philanthropy. Investors expect at least a return of their capital with an adjustment for inflation and, in many cases, a lot more than that.
Lessons for impact investing can be drawn from fields such as infrastructure, venture capital, private equity, microfinance, corporate social responsibility and responsible investment. Ghana as a country has huge potential in impact investing in financial, housing, agriculture, education, energy sector and many more.
Realising the potential for impact investing in Ghana is not a soft proposition. It demands innovative thinking and focused action to build practice and create viable investment vehicles that best suit the local context and opportunities. Without supply of capital, investments cannot occur; without robust impact driven propositions and organisations, capital will not enter or remain in the field; and without people and structures that facilitate supply and demand coming together, many impact investments simply will not happen.
Power supply is a major requirement for economic growth and development. There is a direct link between electricity use, economic growth and standard of living. At the same time power supply has serious financial and environmental implications to such an extent that uncontrolled energy consumption will have adverse consequences on the economy and the environment. The best approach to power...