Module 21 – Conflict and Emergencies


The highest-risk settings for impact investors are those involving civil strife or humanitarian crises. Notwithstanding important peace-making achievements, there are still too many parts of Africa that suffer from inter-ethnic conflict or extremist violence. The infrastructure and assets of entire villages caught in such fighting can be razed to the ground literally in minutes. In other regions, accelerating climate change can trigger severe flooding, or prolonged drought, and consequent food shortages. And pandemics like Ebola can become mass health emergencies and devastate communities in other ways.

Most investors in mainstream finance will stay far away from these contexts, assessing the risks as too high in relation to the rewards. But some impact investors, African and international, have found ways of putting their capital to work to help local institutions, businesses and households manage their risk, stabilize, recover and rebuild—and eventually prosper. Billo and Boyer argue that: “The private sector can invest in sustainable social change through micro-insurance, mutualisation of risk, humanitarian impact bonds, and humanitarian venture capital. The humanitarian community can facilitate these investments by acting as market catalysts, institution builders, anchor investors, and deal generators.”

In post-conflict situations, finding productive roles for external peacekeepers and new, viable livelihoods for local decommissioned combatants is imperative. New funds and vehicles are being set up, tested and refined to take work in this space forward. The Africa Risk Capacity agency of the African Union is one example. The All-India Disaster Mitigation Institute provides liability coverage for cyclones and other climate-related disasters through the provision of household-level micro-insurance. The International Committee of the Red Cross has designed an impact bond to fund physical rehabilitation projects in the recovery phase of humanitarian emergencies. And the UNICEF Innovation Fund that supports evidence-based pilot projects is an initial form of humanitarian venture fund.

As these initiatives emerge and evolve, impact investing in conflicts and emergencies in Africa needs to be systematically monitored and evaluated. This is a new area of evaluation practice that can benefit from the combined capacities of the development evaluation profession and the impact analysts working in innovative finance.


The Africa Risk Capacity agency of the African Union “pools funds from participating states to insure against weather risk, such as drought. Mutualization of risk schemes like this link the effects of natural hazards to payments from a common pool of funds. This incentivizes agencies like ARC to hold governments accountable for taking steps to mitigate the effects of natural hazards. ARC requires that participating states develop contingency plans, detailing how they will use payments to protect the livelihoods of beneficiaries. Their contingency plans ensure that payments from ARC reach beneficiaries as fast as possible” (Billo and Boyer, 2016).


Form small groups and select a chair and rapporteur for each. Take 30 minutes for this exercise. Your group has been asked by the African Union to recommend an approach to evaluating the mutualization of risk program of the Africa Risk Capacity agency. First, what would your top three to five measures of success be? Second, how would you recommend that relevant qualitative and quantitative data be collected in order to assess these measures? And, third, how would you suggest the African Union identify and engage qualified specialists to carry out this evaluation work? Your rapporteur will have five minutes to present your group’s ideas to a facilitated plenary session.


Billo, A. and K. Boyer. Investing in Communities Affected by Conflict and Crises, Stanford Social Innovation eNews, August 25, 2016.

High Level Panel on Humanitarian Financing Report to the Secretary-General. Too important to fail—addressing the humanitarian financing gap, 2015.