"Collaborative Finance for Social Innovation"

Remarks delivered by Walid Badawi, UNDP Resident Representative Kenya

Salutations

Honourable Peter Munya, Cabinet Secretary, Ministry of Industry, Trade & Cooperative, Kenya

My Colleague, Arif Neky, Head of the UN SDG Partnership Platform in Kenya

Partners from the British Council, Ashoka and Impact!Africa,

Dear Social Entrepreneurs and Investors,

Dear colleagues, Ladies and Gentlemen,

All protocols observed,

On that famous African proverb that was mentioned earlier, let me recall a quote from H.E. President Paul Kagame of Rwanda, who asked can’t we go fast but go it together? I believe we need to challenge that notion of accepting that we cannot reconcile the two.

I am delighted to address you all here at the Impact!Africa Social Entrepreneurship Summit 2019 on behalf of the United Nations Development Programme (UNDP).

The Summit’s theme of “Collaborative Finance for Social Innovation” speaks to the core of our engagement both in Kenya and across Africa. We see a strong correlation between social entrepreneurship and innovative financing, which helps inclusive and sustainable businesses to grow. Fostering especially youth and women entrepreneurship and facilitating inclusive financing modalities  which contribute to the achievement of the Sustainable Development Goals (SDGs) and the African Union (AU) Agenda 2063 – all towards ensuring a peaceful, integrated and prosperous continent.

Before I share with you my thoughts on youth and women entrepreneurship and SDG financing in Africa, I would like to thank the British Council and Ashoka for the partnership on this Summit. I would also like to recognise Impact@Africa, the pan-African impact investment development network, which together with UNDP will be contributing to the various sessions today and tomorrow.

Ladies and Gentlemen,

Following the financial crisis of 2007 - 2008, economic growth in Sub-Saharan Africa continues to recover steadily – but many challenges still remain. Public debt is rising; the availability of good jobs has not kept pace with Africa’s rising labour force, which grows by 12 million young people every year. The region’s gross domestic product (GDP) is expected to turn positive this year – but it will remain insufficient to significantly reduce poverty. Total poverty headcount at the international poverty line is projected to decline only marginally.

The SDGs, which guide the sustainable development agenda globally, speak to many common concerns of African countries, at all levels of development, whether youth unemployment, increasing natural disasters and threats from climate change or weaknesses in social coherence, management of state resources and/or violence.

It is in this context, that as UNDP, we are building on our strengths and expertise, namely, our established country relationships and presence on the ground for over 50 years. We are constantly evolving and striving to become more innovative and efficient and we seek to respond more effectively to the new and emerging needs of our diverse partners, and collaborate more closely with a variety of actors – including entrepreneurs and investors. Our Accelerator Labs, for example, are a testament  to our new approach to development challenges and opportunities in today’s complex development environment. Our Accelerator Lab for Kenya for instance will focus on finding solutions to the challenges of youth unemployment.

Ladies and Gentlemen,

Our imperative of “leaving no one behind” underpins the way in which we think about entrepreneurship. Nurturing youth entrepreneurship across Africa is an opportunity that cannot be missed. The continent currently has the youngest population of any region in the world, the average age of the African population is just 19 and a half, so focusing on youth entrepreneurship to help stimulate a recovering economy, whilst creating jobs and new innovations, will be key to Africa’s social, environmental and economic growth.

It is well known that women have strong entrepreneurial attitudes and targeting female businesses will help bring about more gender equality as well as challenge the status quo in a business environment that is so often still dominated by men. Africa specifically has the highest rate of females engaging in entrepreneurship activities at 25.9% of the population – that is encouraging but we must do more to translate this into a real asset for sustainable development and the benefit of the continent.

Ladies and Gentlemen,

Young people and women, as the torchbearers of the 2030 Agenda for Sustainable Development, play a lead role in inclusive and sustainable development, and have been trailblazers in the creation of technological and digital solutions to some of our most pressing developmental challenges. They are creative, technologically adept, and informed of their community needs.

Yet, many young and female entrepreneurs face challenges, including, but not limited to, a lack of access to finance and the necessary business support services that would help ensure their ideas and businesses come to fruition, including through ensuring that Intellectual Property rights benefit the continent. UNDP and other partners can step in here and support youth and women entrepreneurs in overcoming such key business constraints in order to facilitate SDG attainment.

Ladies and Gentlemen,

Impact investment – understood as investment practices that intentionally aim to create measurable social and environmental impact alongside financial return – is a promising tool to provide the funding required by entrepreneurs to facilitate social innovation.

With decreasing official development assistance, impact investment is an innovative and strategic opportunity to harness private sector financing for sustainable development. Globally, the sector is growing with more players entering the industry. Sub-Saharan Africa receives the second largest share of impact investment, just behind North America.

From a development partner perspective, impact investment has the potential to contribute significantly to the achievement of the SDGs and Agenda 2063, which both provide transformational opportunities for the continent.

Dear Ladies and Gentlemen,

However, despite this attention and significant growth, the African impact investment sector is at its infancy stage and cannot meet expectations. The support ecosystem remains underdeveloped with areas such as impact measurement and technical assistance requiring further attention.

Financing needs also remain huge: it is estimated that achieving the SDGs in Africa alone will cost at least USD 600 billion a year. Impact investment – alongside domestic contributions and official development assistance – can cover only part of the existing financing gap.

Ladies and Gentlemen,

Against this background, UNDP has been supporting youth and women entrepreneurship as well as Africa’s impact investment sector for many years. As part of our SDG Integrator role, we pursue an ecosystem development approach that recognises the complexity of our current development challenges and builds on partnership with relevant stakeholders, both public and private.

Regarding entrepreneurship, for example, we developed “YAS! Youth for Africa and SDGs” as an Africa-wide one-stop shop to strengthen the African entrepreneurship ecosystem. As a portal-platform, YAS provides comprehensive support and fills a major gap especially when it comes to networking and funding opportunities for young entrepreneurs across the continent.

YAS! operates in synergy with YouthConnekt Africa, the multi-dimensional youth programme that builds a homegrown and economically empowering and enabling environment for youth from the continent. With a dedicated entrepreneurship element, UNDP supports the Government of Rwanda and other partners in scaling up the programme across Africa, where it is now implemented in more than ten countries, with Cameroon being the latest addition coming on stream only yesterday.

In July this year UNDP Regional Bureau for Africa has partnered with the Tony Elumelu Foundation (TEF) - Africa’s leading philanthropy committed to empowering entrepreneurs - to train, mentor and financially support 100,000 young entrepreneurs in Africa over 10 years towards the achievement of the Sustainable Development Goals (SDGs) and the African Union’s Agenda 2063.

Ladies and Gentlemen,

In order to support Governments in the area of SDG financing, UNDP launched the Finance Sector Hub (FSH) to bring together all of its work and capabilities to provide an integrated and comprehensive service offer connecting both the public and private sides of collaboration. One of the Hub’s flagship offers is SDG Impact, which enables more effective investing for the global good for example through our SDG Impact Practice Standards for Private Equity Funds and the SDG Investor Maps. I am sure you will hear more about these innovative UNDP offers over the course of the next two days.

In Africa, UNDP has been supporting the impact investment sector ecosystem since 2015. In collaboration with the AU, together with the Swiss Government through the Swiss Development Cooperation agency, UNDP led a multi-stakeholder effort with industry leaders to develop a comprehensive Impact Investment in Africa Action Plan, whose implementation is now led by Impact!Africa. With UNDP’s facilitation support, the Network has evolved into a fully-fledged organisation and is a partner of this Summit, serving as the catalyst for the successful development of the impact investment ecosystem across Africa.

In Kenya, our Country Programme Document (CPD 2018-22) which is the UNDP development offer to Kenya through the UNDAF 2018-22 places the youth at the centre of development thinking and interventions. Under our Inclusive Growth portfolio and initiatives such as the Biashara centres and the UNDP Accelerator Lab which I spoke of earlier, we endeavour to co-create socio-economic and innovative opportunities for young people where they can be able to explore their full potential to specifically address the challenge of unemployment, with the aim of reducing inequalities.

Ladies and Gentlemen,

UNDP recognises the private sector as a critical development partner. We support youth and women entrepreneurship to contribute to the eradication of poverty and inequality, and we assists Governments not only to close the SDG financing gap but help them to re-orient how public and private actors interact with each other in a system that achieves results in the three dimensions of sustainable development: economic, social and environmental.

In the spirit of the Next Generation UNDP, where we create new solutions, build collaborative platforms, and spark new partnerships and instruments for development while building on our assets, we pledge to continue our efforts to create a conducive environment for youth and women to make their own contributions and be the drivers of Africa’s emergence as the centre stage of entrepreneurial talent, drive and success. Examples of such collaborative platforms have also included UNDP’s partnerships with the UN Global Compact and its various networks in Africa, including here in Kenya and in South Africa where I was located previously, but we must endeavour to do more to connect these regional platforms like Impact!Africa with the relevant country networks.

We also commit to continue investing heavily on the effective governance of SDG financing and help to advance innovative financing solutions, especially oriented towards social enterprises and including through Impact!Africa. I invite you to join the Network for its Annual General Meeting 2019 on Friday on the sidelines of the Summit to contribute to its way forward. I was myself privileged to participate in the launch of this Network in June 2018 in Johannesburg, South Africa and have witnessed first hand its enormous potential.

We are excited about our partnership for the Impact@Africa Social Entrepreneurship Summit 2019 and look forward to two productive days of exchanges and practical gains for social entrepreneurship in Africa. This collaborative approach – with the British Council, Ashoka and Impact@Africa – will result in the greatest impact for the advancement of social entrepreneurship on our continent.

Thank you again – and I wish you a fruitful Summit.