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Equity for Africa Ltd aims to relieve poverty in Africa sustainably through social investment
Equity for Africa (EFA) seeks to alleviate poverty in a self-sustaining way by creating jobs through investing in small and medium-sized enterprises (SMEs) in Africa, providing capital which would otherwise not available. In order to do this successfully, EFA also builds the infrastructure to deploy the capital and monitor the investments made. EFA also aims to create relationships between people and organisations in high income countries (the providers of capital) and Africa (the users of capital) by providing excellent reporting to investors about the SMEs in which their capital is at work and, where value can be added, direct relationships between investors and investee companies.
Equity for Africa Ltd is an Industrial and Provident Society and is registered with the UK's Inland Revenue as a charity (number XR68162).
OBJECTS
EFA's principal objects are:
(1) the relief of poverty in Africa through enabling the creation of employment by means which include social investment for the public benefit;
(2) to raise funds for this purpose through building understanding and effective relationships, based on the Judeo-Christian tradition, between providers and users of funds, and between citizens of high income and low income countries.
CREATING EMPLOYMENT
We are currently focused on Tanzania. Once a successful track record has been established,the model can then be rolled out in other countries.
Tanzania requires economic growth per inhabitant of 3-5% pa over many years to reduce poverty significantly. The rapid population growth in Tanzania, and death rate from AIDS and related diseases results in a very young population, with corresponding high annual entry into the labour force, estimated at up to 700,000. The labour market in the formal sector has a capacity of 20,000-30,000 new employees a year. Underemployment and unemployment was estimated at 30% of the labour force in the late 1990s and has risen considerably since. The economy is based primarily on an underdeveloped agricultural sector with high dependence on climate.
We target equipment for SMEs in the manufacturing and food production and processing sectors, which uses and adds value to locally-produced raw materials, providing cash income for owners, employees and suppliers. This will increase disposable income and improve livelihoods. It will also have as a specific objective the creation of sustainable employment. We will not be investing to any significant extent in the tourism, transport or service sectors, because fewer jobs tend to be created per $ invested and also because tourism only creates limited employment among the rural poor. We seek out those SMEs with the maximum chance of success as well as the maximum social benefit.
SOCIAL INVESTMENT
One of the key constraints on development in Africa is a lack of investment capital, particularly to smaller businesses outside the tourist sector and rural areas. Equity for Africa aims to raise capital and invest it to start or expand businesses which create employment, improving the livelihoods of employees and their extended families, as well as having knock-on benefits for suppliers and customers of these businesses.
Our overriding priority is to create employment while achieving sustainable growth of the invested capital. Thorough due diligence and monitoring of investments is undertaken and we only invest in businesses which we expect will create employment and achieve a satisfactory return on investment. However, our objective is not to maximise profit. It is to enable employment creation, while preserving and hopefully growing capital.
BUILDING RELATIONSHIPS
We are seeking to build relationships between people and organisations in high and low income countries. We encourage Investment Donors to get to know the people and businesses in which their money is invested and, where appropriate, to lend their skills.
