Where does Africa stand in achieving the SDGs but most importantly what are the financing gaps the continent faces in achieving these goals.
By Hamady Kante
SDGs: The Financing Gap in Africa – It has been three years since the universal agreement on Agenda 2030 to achieve the SDGs. At this point where does Africa stand in achieving these goals but most importantly what are the financing gaps the continent faces in achieving these goals.
First, a quick recap of the purpose of the SDGs
The Sustainable Development Goals (SDGs) are a universal agenda adopted in 2015, calling on all nations to pursue economic development, social inclusion, and environmental sustainability, on the basis of good governance. Simply put, vis a vis Africa, the SDGs objective is to end extreme poverty, hunger and inequality, tackle climate change and build resilient infrastructure to meet Africa’s urgent priorities. So far the continent grade in achieving these goals, is at a mean of 52.9%.
What do we know about financing the SDGs
The Cost: The total investment cost of achieving the SDGs by 2030 ranges between USD 5 and USD 7 trillion per year at the global level and between a total of USD 3.3 and USD 4.5 trillion per year in developing countries. Furthermore, new estimation suggests a financing gap at US$ 2.5 trillion for all emerging and developing countries and between an incremental amount of US$200 billion to US$ 1.3 trillion specifically in Africa.
The Great Challenge
We can agree that investment needs and the linked gaps for the SDGs are enormous and, to achieve this agenda the financing of the SDG has to be impact oriented and transformative. It is also well-known that the majority of the SDG investment needs are in emerging and developing countries, with the majority of it being dedicated to infrastructure, which is “THE” main priority for Africa.
Yes, Africa’s enormous needs will continue to demand substantial investments but to do so while avoiding the risk of crippling debt crisis spilling over the continent. a debt crisis in the continent, we will need to become more self-reliant, now! With the continent scoring the lowest revenue to GDP ratio in the world, financial flows have a hard time meeting the investment needs: private finance is constrained by risk and return, while public finance is scarce. As environmental, social and economic pressures continue to mount alarms are setting off and the gap is on pace to increase due to delayed investments. It is critical to acknowledge that there is a significant opportunity cost in delaying investments into the SDGs.
Looking at Africa over the 2015 -2030 period, the population is expected to increase by 43% and the initial gap of US$ 1.3 trillion will reach US$ 19.5 trillion. This cumulative financing gap represents approximately 26.9% of the world’s gross domestic product (GDP) in 2015. The greater the delay in achieving the SDGs, the more important the “backlog of unrealised investments” needed to catch up, thus the bigger the financing gap will be.
Where do we go from here?
Yes, smarter and more efficient international development financing should be the eminent action, in addition to governments needs to mobilise domestic resources and attract private sources. But first, SDGs should be about setting priorities, political leaders cannot be made accountable to manage, monitor and track 17 goals, however they should be responsible for a detailed national assessment that must be surgically scrutinized in order to have an improved understanding of the real financial demands of the SDGs, consequently setting S.M.A.R.T priorities targets for countries to attract the right investment flows.
The Priorities
1- The way to make the SDGs transformational is to use them as the basis of national and regional investment plans for Africa, the SDGs must establish an investment plan for countries and regions in Africa.
2- Global Funds like the Green Climate Fund, will play a key role in achieving the SDGs in Africa, however, the encountered investment delays in executing already approved programmes or projects must be addressed with impact oriented strategies.
3- Micro to Macro – Support for rural to regional infrastructure initiatives with financial, political and human capital can play a breakthrough in bringing transformative impact in the continent.
4 – Human capital is essential for SDG financing in Africa. Investing in capacity building in the public and private sector will be crucial. The lack of capacity in the civil service must be addressed and Africans must be the first movers in implementing transformative approaches in financing the SDGs.
5 – Lastly but should really be first, the data revolution must systematically be integrated in Africa. The lack of good data or data period is not sustainable if countries intend to attract the right investment flows. Knowledge management will play a key role in empowering financial institutions in applying impactful business models and innovative concepts but also enable the public sector in adopting effective policy coherence & coordination across levels of government.