In the ever-evolving landscape of impact investing, one sector is emerging with compelling potential—Africa’s Creative Economy. The Creative Economy is defined by the United Nations Conference on Trade and Development (UNCTAD), as being those sectors at the nexus of creativity, knowledge, and technology. It is comprised of diverse sectors including audio-visual media (like film and television), music, creative services (like advertising and architecture), cultural sites, design, new media, performing arts, publishing, traditional cultural expressions, and visual arts. These sectors provide an array of economic, social, and cultural benefits that align seamlessly with the goals of impact investing.
As underscored by the United Nations General Assembly resolution 74/198, the creative economy plays a multifaceted role in advancing the Sustainable Development Goals (SDGs). Activity in the Creative Economy particularly influences Goals One (No Poverty), Five (Gender Equality), Eight (Decent Work and Economic Growth), Nine (Industry, Innovation, and Infrastructure), 10 (Reduced Inequalities), 11 (Sustainable Cities and Communities), 12 (Responsible Consumption and Production), 16 (Peace, Justice and Strong Institutions), and 17 (Partnerships for the Goals).
In terms of economic impact, these sectors have proven to be significant engines for inclusive growth and job creation. The Re|shaping policies for creativity: Addressing culture as a global public good report UNESCO (2022), outlines that the sectors represent 6.2% of global employment, are the highest global employers of young people aged (15–29-year-olds) and create over 50 million jobs worldwide. This growth is not isolated; it has a domino effect on sectors like technology and tourism, fostering an economic environment that nurtures innovation and entrepreneurial spirit.
Socially, the creative industries offer immense value as they serve as channels for positive societal change through their direct job creation role. As an example, Nigeria’s film industry creates over one million direct jobs.
In addition to direct job creation, practices, content and the messaging by the sector also advance social benefits like promoting inclusivity and diversity, and advocating for social causes like gender equality and environmental sustainability. As an example, the Kenyan fashion industry’s growing focus on sustainable, ethical fashion contributes to environmental conservation while promoting local culture and generating employment. Such impacts make these industries ideal candidates for socially conscious investors.
Culturally, these sectors not only preserve and promote traditional expressions but also foster a sense of unity and identity. Festivals like Senegal’s Dak’Art Biennale, one of Africa’s most significant contemporary art events, offer platforms for African artists to express their world views and cultural narratives. By investing in these sectors, impact investors contribute to cultural preservation and growth while empowering communities to share their stories and perspectives.
Investing across creative economy value chains like education, production infrastructure and facilities like production studios and manufacturing hubs, equipment and technology, marketing and branding of creative projects, research and development and promotion of sustainable practices across creative industries like film, music, fashion and performing arts result in a range of impact investing aligned benefits. These investments yield economic impacts, such as workforce development, social impacts including community empowerment and job creation, and cultural impacts such as preservation and promotion of traditional techniques and heritage. Therefore, Africa’s creative economy presents an attractive, untapped opportunity for impact investors.
In addition to the above, the ongoing digital transformation of the sector provides even further opportunities for global impact investing as it amplifies the accessibility and marketability of creative goods and services, not only within Africa but on a global scale.
Digital transformation is revolutionizing how the creative industry operates, increasing efficiency and opening up new avenues for growth. For example, digital platforms are enabling artists to showcase their work to a global audience, breaking down geographical barriers that traditionally limited market reach. This has the potential to drastically increase income for artists and other creative professionals, thereby contributing to SDG One (No Poverty).
Digitalisation is also democratising access to creative tools and resources. With online learning platforms and accessible digital tools, anyone with an internet connection can learn new creative skills, fostering a more inclusive creative economy in line with SDG 10 (Reducing Inequalities). Additionally, digital transformation is encouraging the growth of innovative business models, which can attract more investment into the sector. For instance, many African musicians are now using streaming platforms to monetize their music directly. This has attracted significant investment into African music supporting an ecosystem of performers, producers, and other professionals.
At the same time, this digital shift is contributing to SDG Nine (Industry, Innovation, and Infrastructure). As demand grows for digital creative services, there will be a corresponding need to expand and upgrade digital infrastructure across the continent. Impact investors can play a key role here, investing in projects that enhance digital connectivity and accessibility.
Ultimately, the digital transformation of Africa’s creative economy presents a wealth of new opportunities for impact investors. By investing in the digital growth of this sector, investors can contribute to a wide range of SDGs while supporting the development of an inclusive, innovative, and sustainable creative economy in Africa.
Finally, there are unique opportunities that will be created by the African Creative Economy as the Africa Continental Free Trade Area (AfCFTA) begins to take effect. The AfCFTA will provide additional opportunities for impact investing in the African Creative Economy as the agreement is designed to enhance trade amongst African countries, thus opening up more markets for the creative economy and offering increased opportunities for impact investors.
To start with, AfCFTA eliminates tariffs on a majority of goods and services traded within the continent, effectively creating a single market. This could lead to an increase in intra-Africa trade in creative goods and services. The free trade area essentially broadens the market for African creatives, offering more opportunities for growth and scalability. This becomes particularly attractive for impact investors looking for ventures that offer a mix of financial returns and societal impact.
Secondly, the facilitation of the free movement of people across the continent could also lead to an exchange of skills and knowledge. This exchange will ultimately foster growth and innovation within the creative sector, which in turn, presents investors with a larger pool of investable ideas and businesses. Moreover, this also contributes to SDG Eight (Decent Work and Economic Growth) and SDG 10 (Reducing Inequalities).
The implementation of AfCFTA also promises to enhance the digital infrastructure in Africa. The agreement includes provisions to harmonize digital regulations across countries, which can lead to more robust digital infrastructures, benefiting the digitally enabled creative sector. This infrastructure development invites more investment into the sector and aligns with SDG Nine (Industry, Innovation, and Infrastructure).
Lastly, AfCFTA’s potential to boost the African economy at large means that more consumers will have disposable income to spend on creative goods and services, thereby increasing demand. This rise in demand will inevitably attract more investors into the creative economy, thereby contributing to the goals of the AfCFTA and the SDGs concurrently.
In conclusion, the African Creative Economy offers the impact world an unmatched advantage as it presents a confluence of factors ideal for generating both financial returns and positive societal outcomes. As the creative economy continues to evolve and mature, its alignment with several Sustainable Development Goals (SDGs) makes it a prime target for impact investing on the continent.