According to a new report by the UK’s Department for International Development (DFID), the Global Impact Investing Network and Open Capital Advisors, East African nations receive the lion’s share of impact investment within the MENA region and the area is rapidly becoming something of an impact investment hub. Gulf Africa Review recently highlighted the important role the Gulf states were playing in the revitalization of Kenya’s economy in the article Kenya Rising, however impact investment is something altogether different.

According to the report approximately $8 billion in impact investment funds have been allocated to East Africa with Kenya’s Nairobi driving the vast round of funding; the majority of funding managers are based out of the city and Kenya has received approximately 50 per cent of the total spend. Uganda and Tanzania have received 13 and 12 per cent respectively, while Ethiopia accounts for approximately seven per cent of the total.

The report describes impact investors as “those who invest with the intention to generate a beneficial social or environmental impact alongside a financial return—and who seek to measure the social or environmental returns generated by their investments.” The largest investors within the sector are developmental institutions such as the World Bank and other international organizations. The sector receiving the most attention is finance, followed by agriculture, energy and tourism. While private and state-level investment has traditionally focused on agriculture and infrastructure, impact investors are focusing financial mechanisms.

The report claims that while developmental organizations continue to dominate the sector, there are clear signs that venture capitalists, private equity funds, international banks and other organizations are beginning to take a wider role in East Africa. However, the total sum of non-developmental investment totals approximately $1.4 billion, compared to the estimated $8 billion invested by the traditional heavyweights.

However, there exists a tension at the heart of impact investment as impact investors are often dealing with for-profit investors as they seek to raise capital or to reorganize a sector. There is also the issue of reporting, with impact investors seeking different outcomes from those of for-profit investors and measuring success with different yardsticks.