Bridging the SDG financing gap: Panellists call for public-private alignment
Discussants, on the final day of the SDG Action Summit 2024 in Accra, have proposed an alignment of the private and public sectors in solving the financing gap in attaining the Sustainable Development Goals (SDGs).
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They argued that there must be a converging point while leveraging some of the public sector financing to support the private sector. The Managing Director of ECOBANK, Abena Osei-Poku; the Founder and Executive Chairman of LVS Africa, Alhassan Andani; the CEO of Ghana Investment Promotion Centre, Yofi Grant; Senior Investment Advisor AFCFTA, Madam Rosaline Ngeno, and an economist and Risk Analyst, Research Fellow, University of Aberdeen, Dr Theo Acheampong who joined the team virtually - all agreed that there was available capital to support SMEs towards attaining the goals but the challenge had been technical support.
Madam Osei-Poku, for instance, corrected the erroneous impression that banks were open to financing. She said the primary focus was "project pipelines" and whether they were marketable, sustainable and bankable.
She emphasised that financing was not just a bank loan, rather there were other means of raising capital, including listing on the stock exchange, among others. According to Mr Andani, financing must follow scalable ideas and activities.
Scalable ideas
"We have scalable ideas that are not bankable, unfortunately," he said, adding that most businesses collapsed at the demise of the founder. Stressing the "new normal", the former CEO of Stanbic Bank said financing must hinge on profitable, scalable and bankable projects.
Touching on the Ecosystem of financing, Mr Andani said most of the financing of SMEs should be consistent between five to 10 years for them to grow. "Unfortunately, most banks are not prepared to support a business for five to 10 years.
"And sometimes the door is shut at SMEs because they are not well prepared. The banks want to be sure that the money is aligned with the expectation," he said. The high-level panel discussion focused on "Placing the private sector at the centre of SDGs Action — a key to success."
Theme
The general theme for the two-day summit was: "From mid-point to success — Recommitting, scaling up, and accelerating action on the SDGs." For her part, Madam Ngeno said the barrier to countries' financing roadmap was the lack of coordination because different institutions worked in silos.
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Capacity
She indicated that there was a challenge with capacity issues because some SMEs had no clues about SDGs, raising a lot of concerns. Yofi Grant expressed worry about treating climate change differently from the SDGs even though it formed part of the 17 goals.
According to him, it was as though the SDGs were meant for Africa and climate change for the rest of the world. He said, perhaps, the only converging point between Africa and the rest of the world was climate change.
Objective
The objective of the SDGs Action Summit 2024 is to ignite renewed commitment on the continent to the SDGs and to catalyse bold and collective actions for the continent's socio-economic transformation.
Abstract
Despite the significant potential of the private sector, current engagement levels are not sufficient to meet the ambitious target set by the SDGs. According to the "UN Global Compact Progress Report 2023," many businesses are still not fully integrating the SDGs into their core strategies and operations.
Moreover, the "World Investment Report 2023" by UNCTAD highlights a persistent investment gap in key areas such as infrastructure, health care and education which private sector investment can help bridge.
The challenge is to align private sector incentives with the SDGs, ensuring that business activities contribute positively to sustainable development. The different sessions are to explore how to effectively engage and leverage the private sector to accelerate the achievement of the SDGs.