Blended Finance: Critical steps to ensure success of the Sustainable Development Goals

Development Matters Development finance, SDGs , ,

By Chris Clubb, Managing Director, New Products and Knowledge, Convergence

blended-investmentThe facts are known. Official Development Assistance (ODA) from member countries of the OECD’s Development Assistance Committee (DAC) will not grow at the rate necessary to fully deliver on the Sustainable Development Goals (SDGs). Blended finance, defined as the strategic use of official (public) funds to mobilise private sector investment for emerging and frontier economies [1] , is recognised as an important tool within the development toolbox to mobilise new capital sources to achieve the SDGs. Through blended finance, public funds can target a risk that the private sector is unwilling or unable to take. It also can be used to improve the risk-return profile of an investment to an acceptable level for the private sector. What all this does is attract much-needed private sector investment and know-how to projects.
Continue reading →

Informal is normal in Latin America: taxes matter

Development Matters Latin America/Caribbean

By Juan Carlos Benítez, Economist at the Latin American and Caribbean Unit, and Angel Melguizo, Head of the Latin American and Caribbean Unit, at the Organisation for Economic Co-operation and Development (OECD)

latam-map

Informality equals vulnerability. In emerging economies and particularly in Latin America, informal is normal. On average, 55% of workers in the region did not contribute to pension or healthcare programmes in 2013. Although informality rates vary significantly across countries (Figure 1), a common feature of informality is its large prevalence amongst the poor and low-middle income workers (e.g. Jutting and De Laiglesia, 2009). On average, 85% and 73% of households in the lowest earning quintiles do not have any member contributing to social security schemes. Furthermore, informality is “one of the most striking differences, within the middle sectors, between the vulnerable population and the consolidated middle class” (Lustig and Melguizo, 2015).

Continue reading →

West Africa’s diet transformation: Will the region capitalise on its changing food demand?

Development Matters Non classé

By John Staatz, Professor Emeritus in the Department of Agricultural, Food and Resource Economics at Michigan State University, and Frank Hollinger, Economist at the Investment Centre Division (TCIA) of the Food and Agriculture Organization of the United Nations (FAO).

img_6183

Demand for food in West Africa is changing dramatically, opening great opportunities to create new wealth and jobs. But will most of the wealth and jobs be created in West Africa or in the countries that export food to the region? The decisions made over the next few years by West Africans and their development partners will largely determine who benefits from this massive opportunity and its attendant challenges.

Continue reading →

Burkina Faso: Resilience building is underway

Development Matters Non classé

By Julia Wanjiru, OECD Sahel and West Africa Club Secretariat

sahel-week-banner-blog-development-mattersBurkina Faso is a poor, land-locked West African country, with about 18.5 million people, a number that is increasing fast at 3.1% per year. Categorised as a Least Developed Country (LDC), Burkina Faso regularly ranks at the bottom end of the Human Development Index (183 in 2015). Poverty is mostly rural (50.7% rural poor compared with 19.9% urban poor). Food insecurity and malnutrition remain a chronic concern (Global Acute Malnutrition = 8.6%).

acute-malnutrition-rural-areas-burkina-fasoDespite the large number of people living in poverty and the fact that the people of Burkina Faso are among the most vulnerable in the world, they also are very resilient. Continue reading →

Towards a Better Understanding of the Global Alliance for Resilience (AGIR)

Development Matters Non classé

By Jennifer Sheahan, OECD Sahel and West Africa Club Secretariat

Français suit

sahel-week-banner-blog-development-mattersThe time could not be more opportune to promote a better understanding of the Global Alliance for Resilience (AGIR) than now, during the 2016 Sahel and West Africa Week taking place from 12-16 December in Abuja, Nigeria. This is the single most important gathering of stakeholders to discuss food and nutrition security in the region. The week provides a fitting backdrop to review and discuss resilience action.

Between October and December 2016, 10.4 million people were identified as requiring food and nutrition assistance in the Sahel and West Africa. This situation is due to a combination of multiple, interconnected factors, including a lack of food availability, limited access to food and basic social services, and the effects of health and security issues. Over a number of decades, a proliferation of initiatives, projects and programmes of a development and humanitarian nature have emerged in the region to address food and nutrition insecurity. These initiatives, often implemented in an isolated, unco-ordinated manner, outside of any overarching framework, have led to a duplication of efforts, a less than optimal use of resources and a source of competition between organisations. Continue reading →

Recreating effective development co-operation – does it matter?

Development Matters policy , , ,

By Isabella Lövin, Minister for International Development Co-operation and Climate and Deputy Prime Minister of Sweden

HLM2-banner-v0.png
I am going to Nairobi to attend the second high-level meeting of the Global Partnership for Effective Development Co-operation. This meeting comes at a critical time, as we are facing more serious development challenges than ever before. A growing number of conflicts are becoming increasingly deadly and protracted. The number of forcibly displaced people and refugees are higher than ever. Climate change threatens to undermine the progresses we made and is in the end a threat to our very existence. I was recently in Marrakesh at the COP22. While international commitment is strong to push the implementation of the Paris Agreement, we have a long way to go.
Continue reading →

What does the evidence on blended finance tell us about its potential to fill the SDG funding gap?

Development Matters Development finance

By Harpinder Collacott, Executive Director, Development Initiatives

arrow-upSome argue that blended finance, or the use of public funds to de-risk or leverage private investments in development, has the potential to provide part, if not all, of the solution to the funding gap facing the Sustainable Development Goals (SDGs). This is no small undertaking since it is estimated that as much as an extra USD 3.1 trillion annually is needed until the 2030 deadline. No wonder the appetite is strong to look beyond traditional development co-operation and see how private finance can be better mobilised to eradicate poverty. But when it comes to blended finance, some fundamental issues need to be considered before scaling up official development assistance (ODA) investments in this area.
Continue reading →