Discussion on attracting much-needed investment into Africa has generally focused on non-African sources: foreign firms, multilateral financial institutions and non-African institutional investors. Yet far greater attention is now being paid to investment funds based within the continent itself.

As African pension and social security funds grow in size, they have the potential to support more African companies and projects. They can ensure that they maximise the benefits of this investment by building environmental, social and governance (ESG) principles into their investment criteria. This can not only provide more ethical investment but can also help generate more sustainable long-term returns.

ESG strategies allow investors to generate healthy rates of return while helping to tackle environmental problems such as climate change and air and water pollution. They can also help support economic development that promotes higher living standards by investing in companies that pay a living wage to their employees, while offering sick pay and other benefits. The governance side of the equation refers to both sound corporate governance but also good state governance, with corporate recipients of any investment required to commit to transparent and legal interaction with government officials.

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