More than 800 million people live in countries affected by what the World Bank refers to as fragility, conflict and violence (FCV). This is a critical development challenge that threatens efforts to end extreme poverty. This is the sharp end of impact investing, bringing private capital, jobs and regeneration to a part of the world that sees only a trickle of the billions of dollars of private capital now earmarked to support the United Nations’ Sustainable Development Goals (SDGs). The Covid-19 pandemic has only exacerbated such issues, and the need for private capital is urgent.
But, raising private capital to invest in conflict or fragile markets is not easy. With risk appetite waning post Covid, and compliance and governance standards tightening, the issue is being exacerbated. There are stark Investment and resource disparities, the regions remain critically underserved by government policy, ecosystem enablers, and international support.
There is a dire need for startups to serve as role models for how capacity-building will stimulate the local economy, thereby attracting greater FDI and support from the mainland regions.
The larger goal has to be to focus on capacity building and scalability, to empower entrepreneurs building innovative businesses
This means more opportunities for growth for local entrepreneurs, greater employment opportunities for locals, and in the longer term, increased resilience to the negative effects of prevalent conflicts, insurgency, and other barriers.