by Lionesses of Africa Operations Department
This last week Melanie released our 10-year Impact Report (here).
To see published, what has been done quietly and with little fuss over the past 10 years brought home to us the incredible work by our founder and ceo along with a massive team of supporters, doers and Lionesses, day in day out, to bring business knowledge, training, mentorship and access to global supply chains and of course finance, to our fabulous community within which our inspirational membership can learn from each other, support one another, and collaborate and/or trade with one another.
During that time 57 million e-newsletters have been sent out to subscribers - a crazy number and for that we have the additional pressure put on Melanie by one Lioness to thank, who early on had said to Melanie that whilst she recognised being an Entrepreneur was lonely, it was made worse by the fact she was building her business in a rural setting many miles away from other Lionesses and so could not share so much in the physical community and serious support that the Lionesses of Africa brings, BUT, Melanie’s daily newsletter ‘Good Morning Lionesses!’ brought the entire community into her room each and every morning. She loved her morning read connecting her to so many other brilliant Lionesses, learning from their experiences, being exposed to new ways of thinking and was constantly inspired by this. Never stop she said… “Because of this, I am not alone.”
57 million e-newsletters later, over 10 million Green business hacks later, over 5,000 individual Lioness stories later and over 15,000 inspiring Lioness contributor articles later (to say nothing of the 212 events in 21 countries!), and the pressure is now more than ever on Melanie who takes it upon herself to be personally responsible not only for writing her daily blogs but for ensuring the letter goes out without fail every business day to Lionesses building their businesses often in very difficult and demanding situations and bringing hope and employment to their communities. Impact where it is most needed.
Impact is so often reduced to US$ and cents, yet not being a fund or a bank, for the Lionesses of Africa the results of our work are not and never can be, measured in such a binary fashion.
But outside of Melanie’s office and away from her desk upon which rests a constant cup of African Tea, in the huge development finance industry it is indeed US$ that are being reported, but is that what we should measure? Being something that is easy to recognise and count, this has been the ‘go-to’ measurement of the development industry for decades, but has it worked?
Since the world woke up to a US President who was voted comprehensively in (including House and Senate least we forget they still exist), on the back of a load of promises and is now enacting these promises, the world has started to look seriously at the true impact of aid and development finance, and what has been delivered from US$trillions spent over the past decades both by USAID but also by various governments and their DFIs. One could argue that it could have been handled in a less ‘burn everything, ask questions later’ manner that has destroyed so much of the great soft power developed by USAID over the years all whilst saving thousands of lives, but if nothing else, this has created a discussion, which in itself is healthy and has been a long time coming…Certainly for the SDGs - laissez faire was simply not working (UN report here).
For SDG5 (Gender Equality), the gender gap is even wider than thought (World Bank here). “…a mere 15.4% of SDG Goal 5 indicators with data are “on track,” 61.5% are at a moderate distance, and 23.1% are far or very far off track from 2030 targets.”
William Warshauer, the President and CEO of TechnoServe who does incredible work across the Global South wrote in the WEF (here): “Since 1960, the world has spent roughly $5.7 trillion on foreign aid.” $5.7 trillion! Continuing he asks a very direct question: “Of that enormous sum, how much has been effective in fighting poverty?
The shocking truth is that we don’t really know. The International Monetary Fund (IMF) admits, “the effectiveness of foreign aid remains an unresolved issue.” A 2018 study concurs: “The poverty-reducing effects of aid are not well-documented.”
According to 2X Challenge, in SDG5: “…a total of US$33.63 Billion [has been mobilized] to support gender equality and women’s economic empowerment since 2018 (2018-2023)”, (here) (certainly something to celebrate). Of that huge amount, US$8.2 billion went to sub-Saharan Africa, yet if you look at investment into women-owned and run businesses in Africa this is stuck firmly at the 1%-2% level (‘Africa: The Big Deal’ here, P.45). 2024 totals show the stark reality - US$21 million for female-founded firms vs US$2.1 billion for the rest - which is a serious problem as “…young companies that access outside financing are able to grow up to 30% faster than those that do not.” (IFC and WeFI here).
Margaret Kuhlow of the US Dept of Treasury is clear: “Dollars are an input not an outcome or an impact and you don't want the institutions incentivized to go big and expensive when you could maybe have more impact, smaller and less expensive.” Hopefully many will take up her challenge “[to] move to start to measure and incentivize outcomes rather than inputs.”
We have lost count of the amount of times we have knocked on the door of one particular DFI who shall remain nameless, to be told “our ticket size is $10 million and above”, yet this same DFI is a major component of the US$8.2 billion that flowed to Africa. What do they do with that kind of ticket size? Are they going for ‘size counts’ and missing out on what serious impact they could deliver by going smaller and less expensive?
They will argue that they invest in smaller funds which in turn fill the missing middle of $200k to $2million, but we are just not seeing it on the ground, and when great VC female fund managers we know who have proved themselves with seriously impressive results through their first fund (by investing in Lioness’ businesses), struggle to raise a second fund, we have to ask what is actually going on.
The 2022 2X Challenge Insights Report (here) shows that 43% of investments (2018-2020) were done indirectly through Criteria 6 - FIs (banks and funds), vs only 3% for Criteria 1 (that’s us). Yet as Publish What You Fund show, “It is not possible to track on-lending for most FI investments, limiting the ability of stakeholders to monitor their impact…these investments are typically less transparent than direct investments…Where investments flow through FIs, it’s difficult to attribute specific funding amounts as a 2X Challenge investment…DFIs do not disclose their contribution amount (DFI commitment) in cases where the investment is made through a financial intermediary."
Sobering don’t you think?
Some elected leaders (and many more who are not), often use the excuse - ‘if you have nothing to hide, why are you not being transparent’ for launching large-scale investigations and delivering on their own particular agenda.
Why are we allowing this possibility by not making our 2X impact results and information transparent? Why is such essential impact information not flowing back up the investment waterfall? Where and what is the bottleneck?
Is it not time for all of us who truly believe that good jobs, building communities through investing into women-owned and run businesses can and does deliver the prosperity and future for Africa, to insist on serious transparency.
“The time for words has passed” has yet again been used by the UN in a report on the SDGs (see here), which seems to be a constantly used phrase rolled out each year. This time sadly, it maybe for real and we only have ourselves to blame.
Stay safe.