Throughout the workshop series, participants reflected on the defining characteristics of the Sustainable Development Goals (SDGs), the centrality of health to the SDGs, and the implications for implementing the 2030 Agenda for Sustainable Development. This chapter summarizes presentations from several speakers who shared their per-
spectives on these interrelated topics. David Nabarro, special advisor to the United Nations (UN) secretary-general on the 2030 Agenda, recounted the justification for, and evolution toward, multisectoral collaboration in health and the implications for the SDGs agenda. Pedro Conceição from the UN Development Programme (UNDP) discussed the defining characteristics of the goals, considerations for implementing them including the role of the private sector, and the relevance of health across the agenda. Lord Mark Malloch-Brown, chair of the Commission on Business and Sustainable Development, discussed the need to partner with business for better development and tangible considerations for all sectors to promote business engagement in the SDGs. The chapter closes with reflections from Marcel Mballa-Ekobena from his experience as a private equity investor in African markets on the development and investment potential in Africa, the role of country ownership in Africa’s development, and the alignment of private-sector opportunities and national development priorities.
Sustainable progress on health outcomes globally requires both addressing the underlying causes of morbidity and mortality and working across sectors, Nabarro asserted. He described the experiences throughout his career that have led him to this conclusion, parallel shifts in the global health community, and how it is reflected in the SDGs agenda.
Moving Toward Multisectoral Collaboration in Health
During his career as a pediatrician, then a public health professional, and now working on a broader development agenda, Nabarro has persistently recognized that the underlying causes of morbidity and mortality must be addressed to achieve long-term improvements in health. These underlying causes, or determinants of health, cut across all areas of development, such as education, gender equality, and employment. Addressing them effectively requires multisectoral collaboration.
During the 1990s as a civil servant for the UK government, Nabarro began working on health within the context of a broader development agenda. He continued in this integrated approach to health and development when, in 1999, he joined the World Health Organization (WHO) under the leadership of Gro Harlem Brundtland to lead the malaria program. Reflecting Brundtland’s commitment to multistakeholder
involvement in health issues, the mission of the program was to bring increased global attention and engage the private sector, civil society, and academics in a much broader approach to address malaria than had previously been used. While at WHO, Nabarro observed the effectiveness and growing interest from the global community in such an approach. A new fund for health, the Global Fund for AIDS, Tuberculosis and Malaria (the Global Fund), was created and provided an impetus for much broader collective action on malaria. Nabarro noted that this approach—in which collaboration centers on key strategic objectives between business, civil society, academia, and governments, with international organizations playing more of a catalytic rather than lead role as was the case in the past—has resulted in significant reductions in mortality (Global Fund, 2016; Yan, 2015).
Simultaneous to these shifts in the approach to malaria, changes in the HIV/AIDS field were demonstrating a broader and more effective approach to improving health outcomes is possible if, from the start, the approach includes effective partnership among multiple actors. These approaches include engaging government leadership beyond health ministries, such as the development of The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) under the George W. Bush administration in the United States. These shifts in the fields of malaria and HIV/AIDS toward broader engagement and partnerships influenced Nabarro as well as the public health community’s approach to multisectoral collaboration in other areas. With nutrition, the Global Alliance for Improved Nutrition (GAIN) was established; with tuberculous, the Stop TB campaign was developed.
In 2005, Nabarro took a post at the UN to focus on avian influenza and pandemic threats. Given the spread of avian influenza through poultry, it was clear to him that the threat could only be tackled by involving a new range of stakeholders, those within the poultry industry, at each stage of engagement. In 2008, Nabarro shifted his focus to food security. At that time, there was a substantial rise in food prices and Nabarro was asked to assist the UN in reorienting its work on food security, sustainable agriculture, and nutrition. Again, Nabarro recognized, together with others, that the way forward was to seek common working arrangements with businesses as well as with academic groups, civil society, and farmer organizations.
Nabarro acknowledged the challenges in the food sector with building partnerships inclusive of private-sector interests. Food and nutrition has suffered from controversy in such areas as infant feeding, agriculture strategies, subsidies, and the use of pesticides and fertilizers. Given these controversies and historic skepticism, when approaching multisectoral collaboration in food and nutrition, Nabarro focused on creating neutral
platforms to bring together various agriculture stakeholders and food system actors with wide-ranging viewpoints about the roles of business, the influences of climate, and concerns about sustainability. This led to the reform of the Committee on World Food Security, a governance structure for agriculture, food, and nutrition that includes constituencies of private actors, civil society actors, a consultative group on international agriculture research, governments, UN entities, and philanthropic foundations.
Nabarro noted that in the health sector there have been tensions similar to those in the agricultural sector regarding the engagement of the private sector. Some of these tensions have stemmed from concerns over the interference of private interests in setting standards at WHO—tensions that arose during the negotiation of the Framework Convention on Tobacco Control and were compounded by the long-held anxieties among nongovernmental organizations (NGOs) in the infant feeding market. In 2016, the World Health Assembly adopted the Framework of Engagement with Non-State Actors (FENSA), which establishes principles and rules governing WHO’s engagement with non-state actors (NGOs, private-sector entities, philanthropic foundations, and academic institutions) to manage conflict of interest.
Despite these challenges in the health sector and the lack of a multisectoral platform focused on global governance issues, such as the Committee on World Food Security that has been established in agriculture, Nabarro identified several new promising initiatives that are engaging the private sector in specific areas, including the Every Woman Every Child partnership and partnerships around road traffic accidents. While these initiatives are promising, Nabarro suggested that the discomfort at WHO with engaging the private sector still needs to be addressed. As has been seen in the agriculture sector, there will be real challenges, but it is possible to create a neutral space for discussion and negotiation.
Health and Multisectoral Collaboration in the SDGs Era
Nabarro now works across the 17 SDGs, focusing on interactions among the public sector, private sector, civil society, and academia that cut across multiple areas within the development agenda. The SDGs are the results of 3 years of negotiation among all 193 member states of the UN that established the first secular universal plan for the future of the world’s people and the planet. Unlike their predecessor the MDGs that applied only to developing countries, the SDGs are a plan for the whole world with an expectation for all countries—high, middle, and low income—to implement them. This universality of the goals is important,
and Nabarro noted that it reflected a sense among many middle-income countries that the Millennium Development Goals (MDGs) did not hold high-income countries accountable for their actions, particularly regarding environmental sustainability. The second characteristic of the SDGs is their design as interconnected and indivisible activities. The goals span a wide range of development challenges, including peace and justice, climate and other environmental goals, economic development, health and nutrition, and a call for multistakeholder partnerships through Goal 17. Nabarro pointed out there is a principle for all actions to tackle the issues raised by these goals to be implemented in an integrated way. Given this principle, the UN is working to integrate its efforts, for example by linking work on climate issues with efforts to reduce disaster risk, and bringing together initiatives on gender equality and empowerment of women with humanitarian action.
With these two characteristics—universality and indivisibility—Nabarro stressed that the SDGs are a manifesto for all, not just governments or specific sectors. Every company, faith group, and university along with governments and international organizations should align their work with and contribute to the realization of the goals. The SDGs are the business of everyone. Nabarro noted that this shift will require different thinking, organization, and action. While health experts might approach the SDGs through Goal 3—promoting health and well-being, they should recognize their efforts will affect and be affected by work on all other goals. For example, Nabarro noted the importance of access to drinking water and sanitation (encompassed in Goal 6) to improving health, and thus the relevance of sustainable consumption and production (encompassed in Goal 12) to health. This ability to think laterally, Nabarro acknowledged, will be taxing, but is necessary to achieve the goals.
Looking forward, Nabarro urged the forum members and workshop participants to think about new models to enable more collaborative thinking and shared analysis of the challenges in engaging business, civil society, governments, academics, and international organizations to work together on health issues. He acknowledged that there are issues, both real and perceived, with public–private collaboration in health, and he encouraged the forum to undertake a political analysis to better understand these challenges. Nabarro suggested looking at opportunities for stakeholders to work together through precompetitive arrangements that often are free from conflict of interest issues. In concluding, he noted there has been more progress in some other sectors, such as agriculture and sanitation, from which health might learn.
Pedro Conceição, UNDP
Pedro Conceição, an economist at UNDP, shared his perspective on implementing the SDGs agenda, the relevance of health to the agenda, and the role of the private sector in the agenda’s implementation. Like Nabarro, Conceição emphasized the universality and indivisibility of the SDGs, and additionally acknowledged the ambitiousness of the goals and their targets. He described the first generation of global goals, the MDGs, as social objectives targeting poverty reduction and health, while the SDGs span a much broader agenda, addressing the unfinished agenda of the MDGs as well as sustainable patterns of consumption and production, issues of inequality, and questions related to governance and peace building. Beyond the inclusion of a broader set of challenges, the targets of the SDGs are also more ambitious than the MDGs. For example, the MDGs included the goal of reducing the 1990 poverty rate baseline in half by 2015. The SDGs aspire to eliminate poverty altogether by 2030. There is a similar level of ambition across the SDG targets. Goal 3, ensuring healthy lives and promoting well-being for all at all ages, includes targets calling for the end of the epidemics of AIDS, tuberculosis, malaria, and neglected tropical diseases; achievement of universal health coverage; and elimination of preventable deaths of newborns and children under 5 years of age.
Implementing the SDGs Agenda
Reflecting on the characteristics of the goals—universality, indivisibility, and ambition—Conceição suggested four implications for implementing the SDGs agenda:
- approaching policy making in a significantly more integrated way
- understanding and addressing the systematic social and economic drivers of exclusion to ensure no one is left behind
- managing risk and volatility
- improving the provision of global public goods
The SDGs agenda requires policy making and policy choices that are integrated rather than siloed, sectoral approaches. Recognizing this need, as Nabarro also noted, the UN secretary-general has asked individual agencies to work across the UN charter in more integrated approaches than ever before. While previous initiatives have connected the social
and economic sectors, and at times the environmental sector as well, this new call for integration goes much further. New initiatives are bringing together the development pillar of the UN with peace and security, humanitarian action, and normative agendas such as those on human rights. Conceição elaborated on the need for integrated approaches through several examples documented in the following section on health and the SDGs agenda.
In recognition of the ambitious nature of the goals and their targets, the second implication is the need to understand and address the drivers of social and economic exclusion. The 2030 Agenda has the aspiration of leaving no one behind and, Conceição suggested, achieving it will require addressing the deeply entrenched drivers of social and economic exclusion. To a large extent, the implementation of the MDGs focused on meeting its targets by increasing access to service delivery. While access is important, Conceição emphasized that reaching the last mile, as called for in the SDGs, will require understanding why some individuals and communities have been systematically left behind, often generation after generation. In different parts of the world, people are systematically excluded for different reasons, thus it will require contextual and cultural understanding of the social and economic drivers. He noted the prevalence of gender discrimination and the exclusion of women globally. Regionally, in the Americas, indigenous populations and their descendants are often systematically being left behind; while in many parts of Europe the Romani people have been excluded. Beyond availability of services, there are deeply entrenched political and social determinants of exclusion that have led to these disparities.
The third implication is the need to better manage risk and volatility. Conceição stated that during the MDGs era there was an implicit assumption that development was a steady upward trajectory. However, experience showed that is not always the case and several shocks impeded progress or, at times, set progress back. These shocks had different origins. They have been economic in nature such as the global economic crisis in 2008 and 2009, or more recently, drops in commodity prices that have affected many export commodity countries. Shocks have been linked to natural hazards that lead to disasters, such as severe hurricanes and earthquakes. Other shocks included those originating from conflict, including forced displacement crises, and health-related shocks such as the Ebola outbreak in 2014 in West Africa.
The fourth implication is the need to better provide global public goods. During Conceição’s conversations with governments, officials are often struck by how much their country’s progress on the SDGs will depend not only on their own action but also the actions of other countries. This implies a need for collective action across many of the SDGs.
Health and SDGs
Turning to the centrality of health to the SDGs, Conceição stated that UNDP recognizes the significant relationship between health and development and has conceptualized it as human development. In 1990, UNDP published the first human development report, which stipulated that development is broader than the measures of gross domestic product (GDP) growth through which it most often has been evaluated (UNDP, 1990). In the report, human development is conceived of as a measure of the extent to which people live the lives they value and live the lives they want to live. While income and a living wage are aspects of development, human development recognizes the centrality of access to quality education and health. The 1990 human development report tried to capture this concept with what Conceição described as an imperfect measure: the Human Development Index (HDI). HDI combines indicators of income, education, and health. HDI acknowledges the deep connections between health, health outcomes, and development: the way in which a society develops influences the health status of its population (see Box 2-1).
Conceição shared three examples of interventions that illuminate the connections between health and development, and thus have implications for the implementation of the SDGs: the first two interventions illustrate how pursuing SDGs that are not directly related to health can deliver positive health outcomes; the third intervention illustrates the potential for a negative relationship with health outcomes.
Cash transfers is a policy that has been pursued in a number of countries, sometimes as conditional cash transfers where the money that families receive is conditioned on certain behavioral changes. Recently there has been a move toward unconditional cash transfers, which, especially when given to young girls, have been shown to be effective for achieving objectives linked to reducing inequality and poverty (Baird, 2013). While this type of intervention is motivated by social protection and poverty-reduction objectives, Conceição noted that there is strong evidence that when the cash transfers are given to young girls, often there are a range of positive outcomes related to education and health. When girls are recipients of cash transfers, unwanted teen pregnancies have been shown to be reduced substantially, and the rates of HIV/AIDS transmission have been reduced by as much as two-thirds (Baird et al., 2012; Pettifor et al., 2012).
Interventions to reduce the use of cook stoves globally have been designed and implemented to reduce exposure to indoor air pollution, improve health outcomes, and decrease greenhouse gas emissions and deforestation (Duflo et al., 2012; Thomas et al., 2015). Conceição noted that, in addition to cook stove reduction interventions, there is a range of environmentally motivated interventions targeting the reduction of pollution that additionally have the potential for positive impacts on health.
The third example illustrates the potential negative effects on health of an intervention focused on preventing conflict and promoting healing in a postconflict setting. A randomized controlled trial evaluating a truth- and-reconciliation commission in Sierra Leone found that the intervention was successful to the extent it enabled social cohesion and enabled individuals to come together to provide collective services on behalf of the community (Cilliers, 2015). While these results were positive outcomes in terms of healing society, which was the intended objective of the intervention, the study also found that some individuals experienced significant mental health deterioration with levels of depression and anxiety increasing dramatically. Conceição cautioned that the lesson from this experience is to be aware of unintended consequences of the interventions and their effects across the SDGs. Even if the intervention appears to be effective in achieving a goal related to, in this case, conflict prevention, unintended negative health impacts should be considered in the program design.
Drawing on the concept of HDI and these three examples, Conceição suggested that the message on health in the SDGs is that health should be seen as an integral part of the SDG agenda and a driver of implementation across the wide ranging goals. He added that efforts are needed to better understand how the pursuit of other SDGs helps improve or harm health outcomes.
The Role of the Private Sector in the SDGs
Given the ambitious scope, universality, and indivisibility of the SDGs, Conceição emphasized that the development community and governments should start engaging with the private sector in a fundamentally new way—as partners to advance them. The demands of the agenda require mobilizing private capital and private-sector innovation and knowledge to meet the challenges of the 2030 Agenda. For example, achieving both energy access and meeting the targets related to reduction in greenhouse gas emissions can only be accomplished by mobilizing the private sector to invest in and deploy new technologies. Conceição stressed that this need to engage the private sector in new ways also applies to health, particularly in two areas: first, how businesses operate and their employee protection standards; and second, redefining the purpose of businesses.
Through the framework of “inclusive business,” UNDP tracks private-sector companies that pursue profit-seeking objectives while at the same time enable poverty reduction and the pursuit of other social benefits. Conceição explained that these inclusive business approaches flourish in
environments where incentives are aligned for businesses to invest in social good and development. Government and regulation are critical to creating this enabling environment. In some areas of the private sector, there will be resistance to regulations and incentives for private-sector engagement in the SDGs, and additionally some industries will be displaced in this process. Thus, Conceição urged it is necessary for governments to not only create the appropriate regulations but also to manage the transition.
UN agencies have a role in promoting private-sector engagement, Conceição stated, by providing evidence and advocacy to encourage investments aligned with the SDGs. If persuasive evidence is put forward to private investors that investments in the SDGs are a good use of their capital, investments will follow. From an aggregate point of view, private resources are abundant globally. However, despite the significant demands for capital, given low interest rates, the challenge for many private investors is where to invest. Conceição has observed the need to mobilize resources and engage with the private sector to help bring capital to real societal needs. He provided two examples from the energy sector that illuminate this point.
The first example is “de-risking.” Limited capital flows into energy investments in the developing world because of the perception that these environments are too risky. To overcome this challenge, UNDP works with authorities in developing countries to present investment opportunities with a realistic indication of the risk that exists, in contrast to the perceived risk. Additionally, by providing some absorption of first loss, UNDP and the country’s authorities can provide less risky private investment opportunities.
The second example is aggregation. Many projects in the developing world are small in scale and thus are not attractive to investors. UNDP aggregates small-scale projects into a portfolio of investment increasing the attractiveness to major investors. (Chapter 4 illuminates similar market-based models in the health sector and the roles various organizations in supporting them.)
Conceição concluded his remarks by adding that, in addition to encouraging private-sector investments through evidence and advocacy, UNDP and other UN agencies have a role in providing evidence and information to public-sector decision makers in support of country led implementation plans for the goals. Given the indivisibility of the SDGs, examples are emerging of government decision making that factors in the potential trade-offs or cobenefits of investments across sectors. UNDP is working alongside governments to provide evidence and information on these trade-offs and cobenefits with the objective of leveraging available resources and creating broader coalitions of support for investments with cobenefits. Through the United Nations Development Group, UNDP
and other agencies have designed a common approach to provide support to the implementation of the SDGs. The approach is called MAPS (mainstreaming, acceleration, and policy support). The objective of the approach is to help countries integrate the SDGs into national plans and budget processes (mainstreaming), identify key interventions to move the agenda forward across all the SDGs (acceleration), and draw on the specific expertise that different UN agencies can offer to help countries take this forward (policy support).
Mark Malloch-Brown, Business and Sustainable Development Commission
When the MDGs were adopted, Lord Mark Malloch-Brown was administrator of UNDP, the agency leading the UN’s development efforts, and thus he oversaw the creation and implementation of the MDGs agenda. Malloch-Brown described the MDGs as a reflection of the time when they were implemented. Progressive social democrats were leading most donor governments, and the goals reflected a shared social democratic view of the progressive power of the state to provide a basic social safety net across the world. The MDGs sought to alleviate the worst of extreme poverty, promote at least primary education and basic health care, and reverse environmental degradation. While the SDGs are a much more ambitious agenda, Malloch-Brown emphasized that they build on the relative success of the MDGs. The MDGs exceeded the goal of halving the number of individuals in extreme poverty; there have also been significant improvements in many parts of the world in education enrollment rates, in health outcomes, and in other goals. SDGs offer a more comprehensive vision for the world and reflect the global needs for at least the next 15 years. To address health priorities within the SDGs, Malloch-Brown proposed four connected focus areas: public health, health systems, health provisions and insurance pools for the growing middle class across developing countries, and innovation and scale. Health provision in many parts of the world remains at such a low level that focusing on public health, including basic needs such as access to water and sanitation, can have the greatest immediate effect on health outcomes. However, Malloch-Brown noted that even when public health conditions are provided for, illness and disease conditions need to be managed through health systems and access to health services. Health systems across country income levels are under stress. In developed countries, a combination of demography and rising costs driven in part by medical advances has put systems under extraordinary stress. In developing countries, the crisis has different roots, and there is
a need to both strengthen and expand systems to keep up with population growth. The third area that Malloch-Brown identified, provisions and insurance pools for the middle-class in developing countries, is a product of economic growth and the associated expanding middle class across the developing world. More families are seeking opportunities to buy health insurance and access quality health facilities, and provisions are needed to provide options for access and coverage. The fourth focus area of innovation and scale will serve to create more efficient systems that offer better access, quality, and value. Within each of these four areas, Malloch-Brown noted that there is a role for the private sector.
Role of the Private Sector in Development and Health
Before discussing the role of the private sector in health specifically, Malloch-Brown shared some reflections on the role of the private sector more broadly in development and the SDGs agenda, particularly in the context of the Commission on Business and Sustainable Development, which he chairs. The commission includes 35 appointed business leaders that represent some of the largest multinational companies as well as also small and medium-sized enterprises. As a group, the commissioners are articulating the case that there is an extraordinary prize for businesses that align with the SDGs agenda. Currently, according to Malloch-Brown, the majority of the global economic system is trapped in an old model that includes high risk and is subject to volatility. He noted that the current system is heavily dependent on energy prices and access to other finite resources in the global economy. Additionally, 13 percent of the global GDP is spent on security, which is complicated by issues of migration and conflict driven by poverty and environmental degradation as well as other interrelated factors. The current global economy leaves a billion or more people out of it who could be consumers and workers but are marginalized instead.
Malloch-Brown and his commissioners are proposing a retransformation of business away from this old model and toward an alignment with the SDGs (Business and Sustainable Development Commission, 2017). They are concentrating their research and work around four sectors: urban/energy, mobility and communications, agriculture, and health and education. The commission has identified these four sectors with the understanding that (1) every business can find alignment with one of them, and (2) they represent the primary drivers of performance across all 17 SDGs.
Despite his optimism about the potential to transform business, he acknowledges that the challenge and resources needed to meet the SDGs is enormous. Economists predict an annual shortfall of approximately
$2.5 trillion in the investment needed to meet the goals (UNCTAD, 2014). The challenge is how to bridge this gap, and Malloch-Brown shared examples of private-sector engagement in the health sector that he feels are promising models. The Abraaj Group, a private equity fund based in the Persian Gulf, has developed a health fund built on a blended finance model that brings together hard capital that is seeking a fully commercial return with philanthropic capital that seeks a return of expanded access and reach for low-income communities to health services and facilities. Another example is in the telecomm sector; Safaricom in Kenya is sponsoring initiatives to provide health services through mobile devices (Safaricom’s model is described in more detail in Chapter 6). Malloch-Brown noted that the Abraaj model is using private capital while the Safaricom model is built on private-sector innovation, both of which are critical components of private-sector engagement in the SDGs.
While private-sector capital and innovation are needed to implement the SDGs agenda, Malloch-Brown emphasized that these private-sector investments need to be responsible investments that accept the social contract that comes with being invited into the development sector. He cautioned that the world’s poorest, most marginalized, and vulnerable people cannot be subjected to market capitalism that focuses only on short-term investment returns rather than the long-term needs to support sustainable development. For this reason, he feels private-sector investments in development need to be through partnerships that include government as well as communities that are being served by the investment to ensure it is thoughtful, responsible, and long term. With this recognition, the commission is crafting its message to the private sector that there are significant economic returns through investments aligned with the SDGs, but for these investment returns to be realized, such investments need to be made through a social contract with a mutual commitment to responsible capital and innovation.
Bringing private capital and innovation into development should not be through models that are privatizing development but rather adding a private-sector dimension to development. While this arrangement requires business to change its model, Malloch-Brown added that it also requires those in the development community to suspend their suspicion of the private sector and to help governments create an enabling environment for effective, responsible business engagement in development. Malloch-Brown concluded his remarks by emphasizing that now is the moment: the old economic model is giving way and, consequently, trust in business has rarely been lower. It is time for a fresh start through new partnerships, and the SDGs agenda provide an entry point.
Based on experience as a private equity investor in African markets, Marcel Mballa-Ekobena shared his perspective on development and investment opportunities in Africa within the context of the SDGs. He has observed two broad trends:
- The gap between priorities and the actual needs on the continent is growing.
- The private sector has decoupled from a government-led framework.
Based on these two trends, he proposed two necessary shifts in development and investment on the continent:
- Move from problem-solving approaches to positioning approaches with communities at the center.
- Focus on job creation, entrepreneurship, and the informal sector to grow economies and spur development.
To demonstrate these trends and proposed shifts and their relevance to the SDGs, Mballa-Ekobena discussed three interrelated areas: the development and investment potential in Africa, the role of country ownership, and the alignment of private-sector opportunities and national development priorities.
Development and Investment Potential in Africa
The attractiveness of investing in the African continent often focuses on GDP and GDP forecast compared to the rest of the world (see Figure 2-1). However, Mballa-Ekobena argued that GDP can be an unreliable measure of growth and investment potential. The biggest contributor to GDP of African economies is often government spending and Mballa-Ekobena suggested a need to closely evaluate both the quality of this spending and if it supports long-term investment in the local economy, rather than focusing on the amount of investments being made. Additionally, these economies are largely based on imports, which may not bode well for long-term investments in current context of weak global commodity prices. Instead of evaluating investment potential based on
GDP forecasting, Mballa-Ekobena encouraged a focus on profit and jobs, foreign direct investment (FDI), the informal sector, and remittances.
A relevant pattern to evaluate attractiveness from an investing perspective is the amount of profit generated in an economy regardless of the GDP measures. Mballa-Ekobena explained profit provides a sense of companies’ and entrepreneurs’ ability to extract value from economies. Mballa-Ekobena then turned to FDI, which, together with overseas development assistance totals about $115 to $130 billion on the continent. The Africa Attractiveness Index helps guide decision making for FDI by providing a measure of economic resilience and demonstrating progress in critical areas of longer-term development. However, Mballa-Ekobena noted that decision making for FDI is sometimes influenced by perceived rather than real risks and potential rewards. For example, there tends to be a bias toward certain countries in Africa by the international community despite the indicators of investment potential.
The informal sector is another relevant economic factor for evaluating investment and development potential. The informal sector makes up about 50 percent of the economy across Africa and accounts for about 80 percent of the job market (AfDB, 2013). Mballa-Ekobena suggested the informal sector is where the vibrancy of these economies lies and should not be overlooked when evaluating the potential for growth of African economies.
Finally, Mballa-Ekobena added that remittances, the sum contribution into African economies by Africans abroad, can be the lifeline of smaller countries, constituting up to one-third of a country’s GDP (IFAD, 2009). While it is difficult to gauge how much has been contributed to the continent by the diaspora through remittances, Mballa-Ekobena suggested that it is arguably almost as much as FDIs and overseas development assistance put together. This heavy reliance on remittances makes countries particularly vulnerable and sensitive to global economic cycles.
After sharing these four dimensions for evaluating investment attractiveness in Africa, Mballa-Ekobena discussed the role of country ownership in determining development priorities for the continent. In 2014, a number of national academies of sciences in Africa jointly published the report Mindset Shifts for Ownership of Our Continent’s Development Agenda (UNAS, 2014). The report identified communities as the “core of owning African development, as they are both the drivers and beneficiaries of the development agenda,” and recommended that African governments involve communities in the planning, implementation, monitoring, and assessment of their development agenda; and acknowledge the value of
traditionally resilient communities by integrating cultural practices and understanding into the development framework. The report also noted that private-sector institutions, particularly small and medium-sized enterprises, are crucial to advancing sustainable development objectives; however, many African small and medium-sized enterprises are constrained by a lack of access to capital, or by limited capacity. The report acknowledged that innovative associations and partnerships to overcome these constraints exist, but they are currently underused. The report recommends that the primary route to stable institutions in Africa, both public and private, is increased capacity, realized through transparency, accountability, and equitable access to resources (UNAS, 2014).
Alignment of Private-Sector Opportunities to National Development Priorities
Drawing on the dimensions for evaluating investment opportunities in Africa and the mindset shift toward country ownership that was articulated in the 2014 report, Mballa-Ekobena shared several reflections on aligning private-sector opportunities and national development priorities. He posited there is a need to move from a problem-solving environment into a long-term positioning mindset. Mballa-Ekobena suggested such a move is a mindset shift from investments focused on individual interests and current needs to tackling and preventing the collective problems of the future. For example, while there often are positive social and business outcomes from investment in infrastructure, if these investments are not part of a bigger development agenda, they may not meet the needs of affected communities, and they may fall short of their potential in both social and investment outcomes. An example would be investing in road infrastructure that does not account for the projected growth in the number of cars that will be on the road in a developing country within the next decade. Some of the key sectors requiring this positioning approach are energy security, food security, and health access (see Figure 2-2). Mballa-Ekobena emphasized that there are many investment opportunities to grow the health care sector; in East Africa alone, about $3 billion per year is spent on medical treatment outside the region, demonstrating a need for investments in the region.
Lastly, Mballa-Ekobena explained that there is a growing entrepreneurial spirit across the continent that is driving a decoupling of job creation from the public sector. In this regard to job creation, Mballa-Ekobena suggested that there has never been a luckier generation on the continent than the current one. Access to information and knowledge is providing an opportunity for entrepreneurship and immediate changes. However, to realize the potential of the opportunity, he suggested that Africa has to be
confident in itself and needs confidence from outside investors to realize its development potential.
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