BY Richard Bailey | July 3, 2018
“Money doesn’t grow on trees.” Regardless of where you grew up, we all learn about the importance of securing every penny, rand, real, euro, yen, ruble, or rupee. And the saying is particularly relevant today since development organizations like the United Nations (UN) must mobilize more than US$3.0 trillion every year if we hope to achieve the ambitious goals laid out in the 2030 Agenda for Sustainable Development. Official development assistance (ODA) is still an important finance mechanism but only $140 billion are secured each year. If we, the UN, intend to accelerate progress so no one is left behind, ODA needs to be used more strategically, and other sources of finance must be secured. There also needs to be an organizational shift from strictly funding programmes and initiatives to an approach that involves “funding and financing” to tap into international, national, private and public financial flows. Perspective shift: from funding to financing A growing number of blended finance sources have helped advance development aims in recent years. Private sector guarantees, syndicated loans, and shares in collective investment vehicles mobilized $36.4 billion, while socially responsible investing exceeded $6 trillion between 2012 and 2014. Impact investors and development finance institutions created a new investing asset class that is projected to grow to $400 billion by 2025. When it comes to financing, the rules are changing, and the UN is looking at new ways of aligning financial flows and attracting new investors. UN Country Teams (UNCTs) in Kenya, Indonesia and Armenia explored ways of helping national governments and local partners secure broad, non-traditional funds for development purposes. They mapped out challenges, unlocked new types of financing and used resources in a timely and innovative manner. The three most successful tools adopted were impact investing, Islamic financing, and sector-specific fund modalities. Impact investing in Armenia In the last few years, Armenia has turned into a thriving tech start-up hub and financing initiatives have followed two major trends: venture philanthropy and impact investing. To capitalize on these new forms of funding, the UNCT set up a country platform for SDG implementation that is aligned with national reform and SDG efforts. The collaborative space allows the UN, development partners and civil society to strengthen relationships and develop new ones with international financial institutions, donors and philanthropists. Other innovations: SDG Innovation Lab, the Kolba Social Innovation Lab, ImpactAim Venture Accelerator. Islamic financing in Indonesia Home to the world’s largest Muslim population and the tenth largest economy, the Government of Indonesia recently turned to inclusive and ‘green’ financing to accelerate the SDGs. The UNCT saw the potential and embraced new forms of finance to support sustainable development initiatives. Good practices include employing blended finance instruments and Islamic financing (Baznas). In 2017, UNDP channelled zakat (charitable funds) for a micro-hydro energy project to improve access to water, renewable energy and livelihoods in some of the most remote parts of Indonesia. Other innovations: Financing Lab, “Bring Water for Life” and #TimeforTigers crowdfunding campaigns. Primary health care financing in Kenya One million people in Kenya fall into poverty every year because of a fractured health care system, which is why the national government prioritized rolling out Universal Health Care in the “Big 4 Action Plan.” The UNCT supports the government by working with private sector partners on the Private Sector Health Partnership Kenya initiative and SDG Philanthropy Platform. Bringing together the private and public sectors together has opened doors to new cross-sectoral opportunities in the health, tech, early childhood development, nutrition, and technical and vocational training sectors. Make it rain: harnessing the potential of innovative financing The cost of solving the world’s most critical problems currently runs into the trillions, forcing development financing into a new era. There are no other options if traditional development aid no longer makes the grade. The UN has to pivot and embrace the changes taking place or risk becoming redundant and irrelevant. Luckily there are many opportunities to seize, and the UN has plenty of comparative advantages to bring to the table. The organization has a long, successful history of bringing together partners, training and recruiting experts, scaling up projects, and imparting technical knowledge. UN staff are skilled in advising, brokering knowledge, innovating, analysing data, and measuring impact. As we have seen in Kenya, Armenia and Indonesia, capital can be mobilized through impact investing, attracting early investors, or securing funds for larger investments in sectors identified by the central government. Embracing the latest tech innovations (e.g. e-health or mobile diagnostics) can turn unattractive investment areas into “bankable propositions.” Perhaps the most important takeaway is to not “let perfection be the enemy of the good.” Change may take time but UNCTs can’t wait for everything to be in place before embarking on new initiatives or adopting innovative types of financing. Steps to secure the right kind of capital have to be taken because time is running and “business as usual” no longer works—the numbers tell the whole story. Societal progress involves taking calculated risks, and achieving the SDGs is no exception. Unlocking new sources of funding is one way the UN can make sustainable gains and help governments make returns on the 2030 Agenda. ----  Discussed in detail in “Financing the UN Development System. Pathways to Reposition for Agenda 2030” (September 2017), Dag Hammarskjöld Foundation in collaboration with the MPTF Office, http://www.daghammarskjold.se/wp-content/uploads/2017/09/Financing-Report-2017_Interactive.pdf.  Amounts Mobilised from the Private Sector by Official Development Finance Interventions: Guarantees, syndicated loans and shares in collective investment vehicles’, OECD working paper, 2016.  Baznas was established by the government based on Presidential Decree 8/2011. The agency is responsible for collecting and distributing zakat at the national level.  Thomson Reuters Foundation, February 2018, http://news.trust.org/item/20180209112650-s1njv/.
BY Alvaro Rodriguez | June 17, 2016
We all know that the Agenda 2030 and the Sustainable Development Goals is an ambitious global plan, but if we are serious about it, building vibrant and systematic partnerships is a vital prerequisite for their successful implementation. At the UN in Tanzania, we are busy building partnerships to support the new global agenda. So far we have engaged the executive branch of the government, to include the SDGs in the next five-year national development plan. We’ve also reached out to youth groups, with whom we launched the SDG Champions initiative. And the media fraternity is joining us to spread the word about the goals in Kiswahili language; and most recently, the private sector. Testing the waters Recently, the United Nations Tanzania partnered with the private sector to benchmark their readiness to support the implementation of the SDGs. We do this through the with the UN Global Compact, the Corporate Social Responsibility Group Africa Limited and the Africa Sustainable Business Magazine. Our first step was to get some information the private sector and their plans for engaging on Agenda 2030. We had a very group turnout - almost 280 of the 350 private sector companies responded to our survey. This targeted research provided some interesting insights on the views of the SDGs by Tanzanian companies. The good news is that they are aware of the SDGs and interested in partnering with the UN to make them happen in Tanzania. According to the results, 60 percent of the people surveyed are aware of the SDGs, being the SDG 8 - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all - the one that resonated most among the participants. SDG 1 - End poverty in all its forms everywhere-, and SDG 3 -Ensure healthy lives and promote well-being for all at all ages - followed on the list of the most popular goals among this sector. The respondents also agreed that, potentially, they can have the biggest impact on SDG 8. Beyond just knowing about them, we are also encouraged that the private sector is ready to partner with us to implement the SDGs, with 60 percent of the participants responding positively to a partnership opportunity to implement the Agenda 2030 in Tanzania. We shared the findings of this survey at the 1st Africa Sustainable Business Summit held in Dar Es Salaam, attended by the Vice President of Tanzania, Samia Suluhu, who encouraged the private sector to actively raise awareness about the SDGs and to build partnerships to assist their implementation. At this stage private sector companies are interested mainly in raising awareness on the new global agenda: Sharing information with their employees, especially on health-related issues, and sharing information on behalf of the UN about the SDGs. Keeping it up According to a UNIDO-commissioned report on engaging with the private sector, “building vibrant and systematic partnerships with the private sector is a vital prerequisite for the successful implementation of a transformative agenda to accelerate poverty reduction and sustainable development in the post-2015 era.” In Tanzania, we will keep working in this direction, we believe the private sector should be taking a strong role in the development in Tanzania with the Global Goals being an integral part of their business proposition. We know that in terms of protecting the environment, preventing corruption and strengthening employment the private sector is absolutely key and their commitment is therefore essential at this stage of Tanzania’s development. The UN will be there to support this effort. Anyone out there that can share their ideas and experiences?