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Partnering with Local Think Tanks: The Nigerian National Partner Case
Published 13 November 2023 | Updated 1 May 2024
Kyungmin Park
Senior Officer - GSG Impact
This piece is part of a 3-part blog series looking at how GSG National Partners are partnering with local research institutes and think tanks to build the domestic evidence base for impact investing. Learnings are part of a two-year project funded by IDRC and supported by GSG Impact, and On Think Tanks (OTT).
Fostering Evidence-Based Impact Investing in Nigeria with Local Research Partner: How to Turn Research into Real Change
In this blog, we feature how the Nigerian National Partner is collaborating with a local research institution the Nigerian Economic Summit Group (NESG), to identify the regulatory issues and financing needs facing local MSMEs in healthcare, education, and agriculture.
We take a closer look at their process of translating their research findings into policy and investor-focused recommendations, part of a campaign to establish Nigeria’s impact investment wholesaler, an independent, yet publicly-backed investment vehicle being set up to increase private sector investment into the three priority sectors of healthcare, education, and agriculture.
KEY HIGHLIGHTS
- A research collaboration between the Nigerian National Partner and NESG aims to identify the regulatory issues and financing needs facing local MSMEs in healthcare, education, and agriculture.
- NESG helped the Nigerian National Partner to solicit expert opinions and industry insights to inform policy decisions to unlock opportunities for more impactful investments, particularly from local pension funds
- The NESG Communication and Advocacy team actively participated in the process of knowledge translation by utilising its platforms, such as the NESG Summit, the NESG Radio, its website, and social media channels to engage with and educate the public on findings from the report.
Unlocking Nigeria’s Impact Investing Potential in Agriculture, Education, and Health
In the last decade, the Nigerian economy experienced highs and lows, with two economic recessions in 2016 and 2020. Despite a 3.4% GDP growth recovery in 2021, health, well-being, and employment indicators worsened, particularly for women and youths, highlighting the need for increased support in Nigeria’s social sector through impact investment inflows. While opportunities abound, the Nigerian impact investing market remains in its early stages, with investment mainly flowing to the ICT and energy sectors, leaving social outcomes, especially among women, less prioritised.
To make the case to potential investors and policymakers, the National Partner set out to produce a series of evidence-based case studies that would illustrate the need for investment instruments that facilitate both impact and financial returns in the agriculture, education, and health sectors. To achieve this goal, the Nigerian National Partner and NESG initiated a research project guided by gender and sustainability principles, and aligned to the government’s priorities outlined in the National Development Plan (NDP) 2021–2025 and Nigeria’s Agenda 2050.
The research project has sought to uncover Nigeria’s untapped impact investing potential by filling information gaps, guiding investment choices, and resolving regulatory obstacles. Using a combination of quantitative and qualitative methods, the study identifies the financial needs of MSMEs in three sectors through an analysis of the strengths and barriers of current impact investment products/interventions.
To bridge the gaps, they put forth a framework comprising three key components — developing the supply of capital, redirecting capital, and pipeline development. Specific findings and recommendations for fostering enhanced private-sector participation will be disclosed in their forthcoming report.
Figure 1 - Size of Impact Investing Deals (USD Million) (Left); and Sectoral Allocation of Cumulative Impact Investing by Non-DFIs Deals in Nigeria (2015–19) (Right). Source: Investing for Impact in Nigeria: A Deep Dive into Agriculture, Education, and Health Sectors report
Enhancing Knowledge Dissemination Through Local Research Partners’ Communication Capacity
Midway through the project, the local team encountered two crucial knowledge translation challenges — translating research findings into policy and investor-focused recommendations and turning these recommendations into tangible actions that could lead directly to policy change.
This is where the NESG’s extensive experience came into play.
NESG brings 25 years of expertise in engaging and communicating with both the public and private sectors on key economic policy issues. Over the years, NESG has cultivated a robust communication and policy advocacy team that employs various channels to mobilize policymakers and investors for the implementation of research recommendations. Their accomplishments encompass a wide range of activities such as research outputs, program execution, seminars, conferences, and workshops aimed at facilitating the formulation and execution of social and economic reform programs, vital for the growth and transformation of Nigeria’s economy. Specifically, the non-profit private sector-led think tank has facilitated evidence-based dialogues that have influenced policies and positive change in Nigeria.
The Nigerian National Partner recognised their experience in translating evidence into effective policies, making them the perfect partner for their project.
Once preliminary findings were compiled, the NESG organised a stakeholder validation workshop. NESG and the National Partner solicited expert opinions to test and validate the suggested recommendations, focusing on the priority sectors with gender and sustainability as guiding principles. Additionally, they harnessed their online radio and podcast platform to present the research findings and facilitate discussions that would keep the findings current.
The project was prominently featured in a panel discussion at the 29th Nigeria Economic Summit, held on October 23–24, 2023, in Abuja, Nigeria. This event provided the National Partner with a distinctive platform to share the report and present it to a diverse audience encompassing participants from both the public and private sectors.
Figure 2 - The Nigerian National Partner and NESG holding a hybrid workshop on Investing for Impact in Nigeria in May 2023. Source: NESG Blog
This collaboration serves to highlight the value of collaborating with a research partner experienced in translating research and evidence into practical recommendations — in Nigeria’s case, recommendations involving the adoption of new and innovative impact investment instruments — and in raising awareness of impact investing by disseminating cutting edge impact investment research through established communication and social media channels.
The final research output by the Nigerian National Partner & NESG can be found here.
This blog is part of a series featuring collaboration case studies of GSG National Partners from Ghana, Colombia, and Nigeria. Through these inspiring stories, we showcase the power of local National Partner-researcher partnerships and knowledge-sharing in unlocking the full potential of impact investing, paving the way for a more sustainable and equitable future.
Stay tuned for more impactful narratives showcasing the transformative power of collaboration!
