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Investment, Power and Protein in sub-Saharan Africa: Glossary

Investment, Power and Protein in sub-Saharan Africa:

  1. Introduction
  2. Background
  3. Research Methodology 
  4. Sub-Saharan Africa’s Agricultural Investment Landscape
  5. Investor Visions
  6. National Subsidies and Global Market
  7. Conclusions 
  8. Glossary

Suggested citation:

Brice, J., (2022) Investment, Power and Protein in sub-Saharan Africa. TABLE Reports. TABLE, University of Oxford, Swedish University of Agricultural Sciences and Wageningen University and Research.




An asset is an item of property with the capacity to provide its owner with an income over time (for instance in the form of dividends, interest on a debt or property rents). Debt instruments, equities and physical items (or ‘real assets’) such as buildings or land are all counted as financial assets to the individuals or organisations which own them because all of them hold the potential to produce a financial return in the future.

Commercial Banks: 

Commercial banks raise funds primarily through accepting deposits of money from individual and business customers, which they then invest on behalf of their clients. The bank then uses the revenues generated through these investments to pay customers an agreed rate of interest on their deposits. In most markets commercial banks are highly regulated in order to protect the deposits of individual savers and small businesses and therefore focus on relatively low-risk investments such as loans to businesses or to individual mortgage borrowers.


Debt investors lend money in return for an undertaking that the original sum plus an agreed rate of interest will be repaid to the investor (or creditor) over time. Debt investments in sub-Saharan Africa are most commonly provided in the form of loans, in which an organisation makes regular payments to the creditor until the original investment (or principal) plus any interest incurred over time has been repaid. If a company ceases trading then the proceeds from the sale of its remaining assets are typically used to repay its creditors first with any remainder used to compensate equity investors. As such, debt instruments are typically considered a low- risk category of investment.

Development Finance Institutions (DFIs): 

DFIs are specialised public sector financial institutions – such as the World Bank Group, the African Development Bank and British International Investment – which are owned either by individual governments (‘bilateral’ institutions) or by intergovernmental organisations such as the UN, the EU or the African Union (‘multilateral’ institutions). They are established with a mandate to support economic development in the Global South (or specific regions within it) and therefore often invest proactively in organisations, locations and projects which are considered too risky or insufficiently profitable to attract commercial investment. DFIs typically finance public, private or third sector initiatives which align with their development goals using instruments such as grants, loans and loan guarantees designed to encourage private sector investors to lend to businesses in their target countries. In recent years DFIs have also become prominent investors in impact funds (see below), and some also take direct equity investments in private companies whose activities advance their development objectives.


An equity investment represents a share in the ownership of a company. Equity investors are paid a portion of the profits generated by the companies in which they have invested (a dividend), and if they own a sufficiently large share of a company then they may become involved in overseeing its management (for instance by taking a seat on its board of directors). Equity investors also have the right to sell their share of the company to another investor at a later date, which can enable them to gain a greater return on their investment than the interest on a loan or bond would typically provide if the value of the company increases rapidly. Alternatively, they may lose most of their original capital if the value of the company declines or it ceases trading. As such, equities are typically considered a high risk (but potentially high reward) category of investment.


A grant is a one-off transfer of money from a funder to an organisation whose aims or projects they support. The grant may be provided to finance the recipient organisation’s operations in general over a period of time or ringfenced to ensure that the money is spent on particular activities. Recipients of grants are not usually expected to reimburse their funders, meaning that grants represent a financial loss to the grant-making organisation which it will need to replace using income from other sources. Grants are used frequently by philanthropic foundations and some DFIs.

Impact Investment Funds: 

Impact investment funds aim to invest in companies whose activities produce both positive environmental and/or social outcomes (for instance renewable electricity generation or the alleviation of food insecurity) and a positive financial return for their investors. Investors in impact funds often include a mixture of philanthropic organisations, DFIs and private sector financial institutions such as pension funds, and they are sometimes considered a means of ‘mobilising’ private sector capital towards investments which are under-financed by purely commercial investors. Some impact funds are willing to make investments which will produce a smaller financial return than their commercial counterparts would be prepared to accept, while others require their investee companies to produce a commercially competitive financial return. While a number of approaches to impact investment exist, most impact funds with interests in sub-Saharan Africa are structured as private equity funds with additional non-financial (or ‘impact’) objectives because most agricultural enterprises in the region are held as private companies.

Private Equity Funds: 

Private equity funds raise money from other financial institutions such as sovereign wealth funds and pension funds, and/or from wealthy individuals. A professional fund manager then invests this capital by purchasing either physical assets such as land and property or equity investments in private companies. Private equity funds usually aim to return a larger profit to their investors than could be achieved through investing in other assets (such as debt or shares in companies which are traded on public stock exchanges). However, equity investments in private companies are often more difficult to sell than many other financial assets, so investors face a greater risk of losing money if the company declines in value or ceases trading.

Venture Capital (VC) Funds: 

VC funds are private equity funds which invest specifically in recently founded ‘startup’ companies with innovative products or business models which promise a high rate of growth. Such companies are considered to be likely to fail and to constitute especially risky investments, meaning that venture capitalists typically require their investee companies to expand very rapidly in order to provide them with a financial return commensurate to their risk profile.


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