Nicholas Daniels is an Government relations strategy adviser.  He is based in Nairobi.

Last week was an interesting time for an international development worker like me to be in London. Walking through Westminster, and seeing the flags of African nations around Parliament Square for the Commonwealth Heads of Government Meeting, I reflected on the UK’s laudable commitment to spend 0.7 per cent of national income on foreign aid at a time when certain public services urgently need more money.

Debate continues in the Conservative Party about the importance of this commitment. Jacob Rees-Mogg believes in cutting the target while the Prime Minister has steadfastly defended it. As someone who implements overseas aid projects across eastern and southern Africa, I can nevertheless see why the 0.7 per cent target – which currently amounts to £14 bn – attracts criticism.

It is however possible for the Government to shift from handing out large sums of cash to often controversial projects to taking more of an investment approach. We can be more targeted in our support to third-world countries, whilst ensuring aid money is deployed more productively.

Nairobi – the city I currently call home – is a hub for tech start-ups and social entrepreneurs looking to create the next ‘killer app’, one which makes money and fixes an intractable social problem too.

From companies pioneering the delivery of clean and renewable energy solutions, to online trading platforms for smallholder farmers that bypass middle-men and sell directly to retailers, Nairobi is one of several African cities in the Commonwealth brimming with innovation.

In the last ten years, Africa has undergone a revolution in access to finance thanks to a DFID grant that supported research into microfinance. After trialling several ways to improve access to financial services in low-income areas, DFID-funded researchers realised African mobile phone users regularly sent airtime to friends and family who lacked cash to buy it themselves.

DFID extended the trial from airtime to cash, and within three years Kenya witnessed a surge in new financial liquidity, previously inaccessible to the vast majority of Kenyans who did not have bank accounts and lived off unreliable incomes. This new service was named M-Pesa – Swahili for mobile money – and it allowed people to affordably transfer cash from one mobile phone to another.

Subsequent developments included savings accounts, loans, and payment services, all done through a mobile phone. There are now over twenty-six million M-Pesa users in Kenya alone, and transactions through this method equal nearly half of national GDP.

The Commonwealth Development Corporation (CDC) is the UK’s little-known development finance institution. Wholly owned by the Government, it currently has a portfolio totalling £6 billion with provisions that came in under Priti Patel to double the value of investments in future.

This is serious money, and it could be an important vehicle for protecting the UK’s commitment to overseas aid by uniting champions and sceptics through greater impact investing.

CDC’s portfolio rightly spans the risk-return spectrum, but to best support the sort of transformational private sector development I believe is possible in Africa and the Commonwealth, investments should be guided by two key metrics: impact and scale.

Impact requires that £1 of investment should generate an additional £1 or more for low-income beneficiaries. An example here would be solar energy, something Africa increasingly relies on. A company selling £10 solar lights can over 12 months save a family £15 from the money they would otherwise have spent on paraffin used for a traditional but less safe light. Over two years – the approximate lifespan of the product – that family will save £30, leaving them £20 better off after deducting the £10 originally spent on the light.

Scale means the number of beneficiaries that get access to that solar light, and CDC should invest in enterprises which can grow their business to reach as many people possible. A company that sells 10,000 solar lights delivering £20 of impact (£200k impact in total) may be less attractive than one which sells 100,000 at £5 of impact per light, but £500k cumulatively. Scale is important because in a continent like Africa, with nearly 1.3 billion people, serving the ocean of unmet need should still be a priority.

Becoming more of an impact investor would enable CDC – and by extension DFID – to continue delivering aid to parts of the world that most need it, whilst taking a stake in emerging businesses which have the potential to provide a financial return on UK money. Impact investing also bypasses corrupt and inefficient development initiatives led by third world governments, directly supporting a new generation of entrepreneurs.

If DFID had taken a stake in M-Pesa fifteen years ago, it could now own a sizable portion of a Kenyan company worth roughly £7 billion.