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Investing in Africa’s future: A roadmap to dignified and fulfilling job creation
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According to Chatham House, Africa is set to become the second fastest-growing developing region in the world in 2025. Against this backdrop of rapid growth, a series of trends reveal significant, yet often overlooked, investment opportunities. We know that many investors are willing to use their power to ask for more from their investments, but not quite sure where to start. Building on Criterion’s work on investment vehicle design in both Africa and the Pacific regions over several years with our partners, this document models how finance can be structured to achieve powerful social outcomes across diverse markets.
An investment thesis is a strategic framework for transforming how to view Africa’s current landscape. It is both practical and aspirational, designed to support the use of finance to achieve systems change and presents a roadmap to how dignified and fulfilling jobs can be created. The thesis themes named below will challenge you to imagine a future that requires new investment approaches, mindsets, and practices. It is rooted in three foundational beliefs:
Throughout, it maintains a clear lens on how different strategies not only generate significant economic value but also unlock new, overlooked investment opportunities and ultimately improve overall fund performance. Criterion offers examples of these investment theses as a model of what finance can achieve when guided by bold imagination, rigorous analysis, and the collective will to act.
An investment thesis is premised on a powerful vision of a future that is both hopeful and equitable, and which provides a clear and actionable pathway to investment. It’s a bet on a specific future and your hypotheses on what would create that future. The process begins with a thorough analysis of trends across various sectors and geographies to define that aspirational future. It then works backward to the present day to ask the critical question: “To capture that future, what must we invest in now?”. This process yields a strategic framework that effectively aligns investment ideas, possibilities, and their practical implementation.
While it is distinct from a theory of change, which names the specific change being created in the world, the investment thesis is a complementary tool. It identifies and names the social, economic, and cultural forces that are contributing to a positive future. It is important to understand that an investment thesis is an investment tool designed for seeing opportunities differently, not a measurement tool. It is also a powerful instrument for redefining the economic outcomes that truly matter.
In these particular theses, job creation is a central outcome. However, the focus extends beyond merely the number of jobs created to encompass their quality, the dignity they afford, and their equitable distribution. We examine how gender, power, and capital intersect to shape labor markets across the African continent and explore how finance can be used to expand the conditions under which inclusive employment thrives. Furthermore, it has the potential to reframe key challenges within a region or market, transforming them into compelling investment opportunities.
Ultimately, an investment thesis is both tactical and aspirational. It outlines immediate, practical adjustments that can be made within existing investment frameworks while simultaneously envisioning a future where young women are not just participants in their economies, but leaders. Each thesis theme outlined below provides a detailed roadmap for how funds can harness their resources and influence to create a lasting and meaningful impact. For each, we present the underlying analytical reframes and showcase concrete examples where capital is already flowing.
This set of examples aims to demonstrate what becomes possible with a little financial imagination.
“Investors who focus on beta rather than chasing short-term alpha gains are better positioned to build portfolios that withstand economic cycles, currency fluctuations, and political instability”
It’s time for investors in Africa to shift their focus from access to power. For too long, the goal has been to simply bring women and marginalized groups to the market. We argue for a bolder vision: one where capital is used to equip these groups with the tools to actively shape and control their economic participation. This isn't just about social good; it’s about unlocking immense economic value. With the African Continental Free Trade Area (AfCFTA) projected to boost trade by up to $70 billion, ensuring women are not just participants but powerful actors is a strategic imperative.
Investing in market navigation is about fundamentally rebalancing economic power. When women gain control over distribution infrastructure, cooperative businesses, and productive assets, they create new, dignified jobs along the value chain for youth and informal workers. This approach challenges outdated financial norms that fail to capture women’s full economic contribution. By prioritizing local, women-led models and trusting their expertise, investors can foster more equitable and resilient community-level economies, generating both robust financial returns and lasting systemic impact.
Investing in market navigation enables women and marginalized groups to move beyond mere participation, giving them control over critical infrastructure and financial systems. By prioritizing resource ownership, tailored financial solutions, and structural investments, investors can enhance economic autonomy and long-term resilience. This shift not only drives financial returns but also fosters systemic change, ensuring that historically excluded groups have the power to shape and influence markets.
This vision is already in motion. Pioneers across the continent are proving the model works:
“This requires a shift in investment thinking - away from attempting to solve the 'problem’ of informality toward recognizing its role as a vital economic system.”
The informal sector is the dominant engine of job creation across the African continent. Over 80% of African workers, especially women and youth, are engaged in informal sectors. Investing in the structure not the forced formalization of these markets can expand employment while improving economic stability. However, the persistent framing of informality as a challenge to be solved, rather than a structural reality to be leveraged, has limited investors' ability to engage meaningfully. Instead of imposing rigid formalization, a strategy of structuring informality through aggregation, infrastructure, and platform-based models can unlock its full economic potential.
Investors who recognize the strategic importance of informality can reshape how capital flows into Africa’s dominant economic base. By investing in platforms and infrastructure that empower informal workers, capital can be channeled toward models that enhance productivity and increase economic agency. This requires a shift in thinking: away from trying to "fix" informality and toward recognizing its role as a vital economic system. With patient capital and a focus on quality, investors can structure informality in ways that drive sustainable growth. This approach also creates pathways to dignified work, where individuals retain agency, flexibility, and fair compensation.
Africa’s informal economy represents a vast, yet often overlooked, source of economic activity and innovation. Structured informality offers new pathways for investment by recognizing the informal sector as a driver of resilience and growth, particularly in rural and peri-urban areas where young women are building businesses embedded in their communities. By structuring rather than formalizing these networks, investors can optimize returns and unlock sustainable growth that reflects the realities of how markets function on the continent.
Informality has already fueled transformative industries, such as fintech, where mobile money networks were scaled rapidly through informal agents. Similar models can be applied across other sectors by investing in solutions that facilitate aggregation and scale for informal enterprises. Recognizing the value of informality also requires challenging investment biases that have historically marginalized these actors. Informal enterprises are often excluded from traditional valuation models, which fail to account for their resilience, scalability, and adaptability. Investors have an opportunity to advocate for new data and methodologies that reassess the full potential of these businesses, ensuring capital flows to enterprises central to Africa’s economic infrastructure.
Investing in Africa’s informal economy starts by acknowledging the vital role of informal workers in Africa’s growth. Investment should focus on leveraging platforms and infrastructure that strengthen and support these key economic drivers.
Many investors are already directing capital toward places that see informality as an opportunity:
“There is no universal “African woman” founder or customer, just as there is no singular African market... Africa’s economies are too diverse, too dynamic, and too complex for one-size-fits-all investment strategies”
In the evolving investment landscape, understanding context remains more important than seeking homogeneity. There is not (nor has there ever been) a universal “African woman” founder or customer, just as there is no singular African market. Businesses that scale through localized, context-aware models are likely to demonstrate greater resilience and adaptability than those that attempt to impose standardized, centralized approaches. Yet, many investors continue to rely on generic models that fail to account for Africa’s diverse, dynamic, and volatile market economies. These one-size-fits-all investment strategies often overlook the significant opportunities that exist within tailored, region-specific approaches.
Too often, capital misreads context and overlooks the job creation potential of localized businesses. One-size-fits-all growth strategies neglect the specific ways in which African women generate employment through context-rooted solutions. By backing models that scale within specific economic systems, investors enable job creation that is both scalable and inclusive. Traditional venture capital models, particularly those rooted in high-risk, high-stakes hyper-growth strategies like "blitzscaling," imported from the US, are ill-suited to the realities of African markets. By embracing specificity and investing in localized solutions, rather than replicating conventional venture capital frameworks, investors can unlock risk-adjusted returns and foster sustainable, long-term growth.
The greatest investment opportunities arise from addressing the distinct needs of specific markets. Look no further than the success of Mobile Money, a uniquely African solution that unlocked a massive market by leveraging the widespread non-consumption of traditional banking. This is the playbook. By backing models that solve real, local problems, investors can unlock superior risk-adjusted returns and foster sustainable growth. True scale is measured not just in financial multiples but in the creation of quality, dignified jobs for women and youth—an outcome only achievable when capital aligns with context. Those who embrace this approach will not only generate strong financial performance but also contribute to the sustainable transformation of African markets.
Africa’s economies are too diverse, too dynamic, and too complex for one-size-fits-all investment strategies. The most successful investors recognize this and scale through specificity – adopting models that are designed for local realities rather than imposed from external markets.
Several leading investment funds have successfully adopted scale-through-specificity strategies, demonstrating that tailored approaches yield stronger, more sustainable returns:
Gender-based violence (GBV) is a material risk hiding in plain sight within investment portfolios. For too long, finance has overlooked the profound economic cost of insecurity. The data is stark: a mere 1% increase in GBV can slash economic activity by up to 8%. When women fear for their safety, their economic participation plummets—taking productivity, retention, and enterprise value down with it. This is a core driver of financial performance. Integrating safety into investment processes not only mitigates gender-based violence (GBV)-related risks but also unlocks growth and resilience opportunities.
Recognizing this, in 2021 Equilo, UNICEF, and Criterion Institute collaborated to develop a GBV risk scoring tool, enabling investors to assess the risks posed by gender-based violence at both the country and sector levels. However, risk assessment alone is not enough—investors must also take proactive steps to prioritize investments in safer sectors and business models that demonstrate a clear commitment to women’s safety and security.
By integrating safety into every stage of investment, we do more than mitigate harm. We identify resilient businesses, foster stable workforces, and unlock sustainable, long-term returns. Investors who value safety will be the ones who outperform.
Women’s safety is not only a social imperative but also an essential factor in investment decision-making. Gender-based violence (GBV) poses significant risks (legal, reputational, and financial) that investors must assess and address. Beyond identifying these risks, investors have a critical role in shaping safer sectors and business practices that protect workers, consumers, and communities while strengthening the long-term sustainability of investments. Investment terms and structures can be used to increase safety practices in the workplace, and to ensure young women can protect their livelihoods and their assets, even in the face of violence at home or in their community.
Integrating safety into investment processes not only mitigates gender-based violence (GBV)-related risks but also unlocks growth and resilience opportunities. Sectors prioritizing the safety of women, children, and marginalized groups are more likely to succeed and deliver sustainable returns for businesses, investors, economies and communities. Safety is a strategic business consideration that drives both social and financial value. Investors that value safety are the ones who see and understand the risk that the prevalence of GBV has on their investment decisions, potential returns and broader economic performance.
The question often begins with what investors can do about GBV, and it begins by seeing safety as a strategic asset. Investors can price in GBV risks, direct capital toward safer sectors, embed safety criteria into due diligence, evaluate workplace policies as rigorously as investors do financial statements, and tie incentive structures terms like vesting terms to measurable progress on safety milestones.
Several financial institutions and investment funds have taken proactive steps to prioritize gender-inclusive financing and support businesses that incorporate workplace safety and security into their models:
“Investors who focus on beta rather than chasing short-term alpha gains are better positioned to build portfolios that withstand economic cycles, currency fluctuations, and political instability.”
The old investment paradigm—favoring stability and predictability—no longer reflects today’s global reality. Volatility and disruption now define markets, supply chains, and entrepreneurial ecosystems. This is especially true in Africa, where economies are dynamic but often face higher volatility and risk premiums. For investors, this environment presents both challenges and opportunities: resilience, not stability, is the real competitive advantage.
Rather than chasing short-term growth, investors can build stronger portfolios by backing businesses that adapt and thrive amid shocks. In Africa, resilience is not just survival—it is a driver of long-term value. Crises do not make markets uninvestable, as proven by investments in regions under conflict. Instead, volatility can be repositioned as an entry point.
Resilience-focused strategies prioritize localization, diversification, and structural transformation—strengthening domestic supply chains, mobilizing local resources, and embedding local expertise. African entrepreneurs, especially women, have long demonstrated the ability to innovate under constraints; these capabilities should be valued as assets. Gender-responsive investing is particularly relevant, as women-led enterprises consistently show leadership in resilience.
Proactive crisis strategies reduce vulnerability while creating new value. Examples include catastrophe-linked insurance tailored for women, or investments that withstand drought cycles, which lower business failure rates. By embracing crisis as a constant and embedding resilience, investors mitigate risk and generate sustainable, scalable, and profitable ventures—while advancing inclusion and financial security.
Investing with a resilience-focused lens shifts the emphasis from short-term growth to long-term adaptability, better reflecting the realities of African markets. By integrating new data sources and addressing biases in risk assessment, investors can more accurately evaluate potential. Resilience, not stability, is the true measure of sustained value. Prioritizing this approach fosters financial returns while driving systemic change and economic agency for historically marginalized groups.
By combining liquidity, alternative funding sources, and resilience-focused strategies, these investors both protect returns and strengthen African ventures against shocks.
Investment theses serve as powerful tools for investing for systems change by providing a compelling (and investable) vision of an equitable and inclusive future, grounded in current realities.
The thinking and theses outlined above illustrate possible pathways to outcomes like decent, fulfilling jobs and transforming local ecosystems, while challenging traditional investment paradigms.
Our work on investment theses reveals a powerful truth: a bottom-up approach to investing in local ventures will build the businesses, value chains and economies that can sustain decent, fulfilling jobs. And every stakeholder investing in or enabling SME growth ecosystems has a role to play to create the right conditions for these futures:
The businesses, fund structures, and strategies named above demonstrate that it is possible to create decent jobs for current and future generations by investing differently. We invite you to be part of that change
Our work depends on an ever-expanding community of team members, advisors, donors, and other partners who help us achieve our mission.
