Much of the conversation about migration, particularly when it comes to Africans, is dominated by the terrible scenes we see reported from Libya and deadly Mediterranean crossings. The narrative is still largely the same—people are seeking a better life in new surroundings.

From an economic point of view, the rapid growth in the numbers from Africa is of great interest. This is especially true for the money transfer industry. Remittances to sub-Saharan Africa grew to $37.8 billion in 2017, according to the World Bank and are forecast to hit around $39.2 billion this year and $39.6 billion in 2019. Perhaps unsurprisingly, as the largest population and economy, Nigeria topped African recipients with $22.3 billion in 2017. Liberia was the African country for whom remittances accounted for the highest share of GDP at 25.9%.

Even as those numbers grow, it’s clear the nature of migration and the migrant experience is changing. Technology is making this even more true. Ismail Ahmed, founder of WorldRemit, a London-based remittances business, is very clear about the impact of innovation on his business. WorldRemit, which opened an office in New York this week, has operations in 50 countries around the world and completes nearly a million transactions a month. It took around £60 million (~$80 million) in revenue last year and has a current annualized run rate of around $100 million.

Ahmed, who is originally from Somaliland, says innovation has played a crucial role in changing the way companies like his are able to connect migrants in Western countries to their homes in Africa, Asia or Latin America for example. Needless to say, the mobile phone has been vital in enabling the ease of connection, more migrants send smaller amounts more frequently now, with apps, mobile money and traditional bank accounts all playing their role.

But while much focus is often on migrants in Western countries, the largest amount of people moving to new countries is within Africa. One of the biggest challenges that face those who have moved to African countries is the lack of infrastructure that makes it easy for them and citizens to move money between neighboring countries. Indeed, Africa has the highest remittances costs in the world. The World Bank typically measures the cost of sending $200 and in the third quarter it was $9.10, compared to the global average of $7.20.

Ahmed sees this as an important opportunity for his company to fix a multi-billion dollar money transfer problem between neighboring African countries. This wouldn’t just have a significant impact on the hundreds of thousands of Africans moving between  countries in search of a decent living, but also even those traveling on short business trips. Not only does technology add a convenience to the process but in Africa it brings a layer of transparency to things like exchange rates which should have significant impact and encourage more economically beneficial movement between countries.

By Yinka Adegoke

Join money transfer stakeholders at the Remittances Africa Confex 2019. Learn more  

Billions of dollars in remittances flowed to Africa in 2017. The money could go further if it wasn’t more expensive to send money to Africa than anywhere else in the world, a new World Bank study finds.

Immigrants sent a $38 billion (€31.1 billion) back home to Africa in 2017, according to a new World Bank briefing paper.

Nigeria accounts for the lion’s share of this with $21.9 billion, followed by Senegal with $2.2 billion and Ghana with $2.2 billion.

“The [African] diaspora … are making a lot of money and they are willing to share that money with the countries which they first came from,” said Africa commentator Ayo Johnson, who hails from Sierra Leone but is based in the UK. “Remittances are going back to their host countries in huge, huge volumes.”

Although the total amount of remittances sent worldwide hit record levels last year, the World Bank found this wasn’t the case in Africa. However, more money was sent to the continent in 2017 than in 2016 when migrants remitted $34 billion.

The real sums sent to Africa are assumed to be much higher. Not only is official data unreliable (or, at times, unavailable), remittances often flow through informal channels carried by trusted friends or bus drivers across borders instead of Western Union and MoneyGram.

An alternative source of income

Remittances have now become one of the most important external sources of finance for Africa.

“Remittances are a lifeblood,” said Nikki Kettles from Finmark Trust, a South African-based organization working to make financial services more accessible to the poor. She said it was families, especially to women and children, who benefited from remittances in southern Africa where her organization worked.

“People working in South Africa send money home, for example, to Zimbabwe, DR Congo and Malawi. People are using [the payments] to feed or educate, not for other reasons,” she said.

Numerous studies have found that remittances directly benefit the welfare of those receiving the money. In poorer regions and countries, such payments can often buffer the vagaries of poverty or instability by covering basic necessities such as food, school fees, rent and health care.

Remittances are also often used to start a business, build a house or buy a vehicle.

Less opportunity for corruption

One of the big benefits of remittances is that, unlike development aid, they flow directly into the pockets of the intended person.

“The strength of remittances is how they are dispersed,” said Mathieu Jacques, manager of the EU-funded ACP-EU Migration Action Programme (ACP stands for African, Caribbean and Pacific countries).

“There are project management cost savings in the way they reach the community,” he told DW. “And there is less opportunity for [payments] to be siphoned off or change direction.”

In some of Africa’s smaller or impoverished nations, remittances are literally keeping their economies afloat. According to the World Bank’s Migration and Remittances briefing,money sent by immigrants make up a significant share of gross domestic product in African countries such as Liberia (27 percent), The Gambia (21 percent) and Comoros (21 percent).

But even if remittances have the power to lift individual families out of poverty, their effect on a country’s economy as a whole is unclear. Some studies suggest remittances help fuel economic growth; other are less conclusive.

“One of the problems is that because [remittances] go into the community in a diversified fashion, there is no targeted investment,” said Jacques. “And without the targeted investment you can’t see incremental change from an economic perspective.”

Fees eat up nearly ten percent of payments

It costs more to send money to Africa – the world’s poorest region – than anywhere else in the world. This means expensive fees eat up a chunk of cash that could otherwise help the receiving families.

The average fees for transferring remittances to Africa was 9.4 percent in 2017, the World Bank found. This is a slight drop from 2016 (when it was 9.8 percent) but it’s still a far cry from the Sustainable Development Goal of slashing transaction costs to 3 percent by 2030.

“Countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money,” said Dilip Ratha, lead author of the report, in a press release.

Companies like WorldRemit that offer cheaper transaction fees below 4 percent have limited resources compared to their much larger competitors to reach out to people in rural parts of the African continent.

It’s not just the cost of transferring money that is a stumbling block. Sending cash via money transfer companies also usually requires showing a passport or identity card which migrant workers might not have, or might not want to show because they lack work permits or visas.

Many are putting their hopes in mobile money transfers as a way of cutting fees and making it easier for people to send and receive money across Africa’s borders. Some services are already offering cross-border mobile payments – although there are still issues such as compatibility and regulatory differences between countries that need to be ironed out.

By DW

Join MTOs, MNOs, Fintechs, Banks, Post Offices, MFIs, Forex Bureaus, Institutional Investors, Regulators, Development Partners, African Diaspora Professionals & Businesses and your colleagues at the Remittances Africa Conference & Exhibition. REGISTER INTEREST >>>

Pay-As-You-Go solar power

In her thesis, Moncayo notes that harnessing solar energy and converting it to off-grid battery power is not a new idea in Africa. She reports that the United Nations Environment Program claims that off-grid lighting solutions are “a multi-billion-dollar market”. At present, reliable and cost-effective Solar Home Systems (SHS) with 20-50 W solar panels that can power LED bulbs and charge a battery are widely available in the region. How are these affordable to the poor Sub-Saharan African population? Moncayo notes that off-grid energy enterprises have adapted their business models to suit their customers. These include Pay-As-You-Go (PAYG) or rent-to-own schemes that allow flexible access to solar energy for as little as 50 US cents per day. Moncayo reports that one of the best-known providers is BBOXX, a start-up founded in 2010 that has now sold over 85,000 systems, reaching 425,000 people, in over 35 countries. Such access to Solar Home Systems has been welcomed as they enable the poorest to save both time and money. Moncayo states in her paper that before they had access to these systems, the typical customer had to spend more money on kerosene for less lighting quality and travel nearly twice a week to charge their phone.

Lack of initial finance

The problem with the schemes currently in place is that they need initial finance.  Moncayo reports payback periods of about 18 months for each system. For a company to achieve financial stability, they need to sell fast and grow fast. However, even when they are able to expand quickly, they have difficulties to pay back short-term loans with their business proceeds. According to Moncayo, philanthropy, public financing, banks, private equity and venture capital have proven unable or unwilling to match Sub-Saharan Africa’s demands to finance off-grid energy. She investigates how impact investments are stepping up to contribute to fill the gap and help to get off-grid power to the masses. Impact investments are investments made in companies, organizations or funds that intend to create positive social and/or environmental impacts, while also attaining a financial return. Moncayo reports that in 2015, from the $16.1 billion supplied by impact investors in West and East Africa, $4.2 billion were dedicated to energy. She notes that most of these did not invest in off-grid options, but those that did are largely multilateral development banks, Development Financial Institutions (DFIs), impact investing funds and corporate impact investors. The support offered by these actors is now also getting ordinary investors interested in off-grid opportunities.

Impact investments are more than finance

Moncayo is also keen to highlight the main non-monetary contributions of impact investors. The first is their obvious contribution to the development and availability of off-grid energy systems. They attract new investors and connect them with providers, including those that are social-neutral. As impact investing is a cooperative, rather than a competitive sector, capital can be aggregated for co-investment, cutting transaction costs. In addition, impact investors can provide off-grid companies with technical assistance and help them grow their networks. Investors get involved in the governance of companies to help preserve their social objectives. Through the impact assessment of their investments, they have the information at hand to further improve the value proposition of enterprises. Overall, the introduction of impact investor capital and management practices strengthens and endorses the entire off-grid sector.

Energy for all by 2030

To attain access to clean energy for all, globally, by 2030, the OECD and the EIA, Energy For All- Financing Access For The Poor report (2011) stated that $48 billion needs to be invested each year. Moncayo notes that, if Sub-Saharan Africa requires 80% of all off-grid electrification, it would need investments of $5.6 billion a year. Based on figures supplied by Bloomberg New Energy Finance, Moncayo estimated that $188 million in impact investments were made in the Sub-Saharan African off-grid energy sector in 2015. This is just 3.3% of that required by the OECD Energy for All Case for that year. Based on projections for the increase in impact investments in the coming years, she predicts that by 2030, the impact investments dedicated to the off-grid energy sector in Sub-Saharan Africa will have the potential to finance 44% of the OECD Energy For All Case annual budget. Moncayo concludes that this is likely to be less than 1% of the estimated multi trillion-dollar impact investments predicted for 2025 by the Global Impact Investing Network. However, she notes that her analysis highlights the power of impact investors, who are emerging as engine for the global economy and key players in tackling the challenges that the world faces today.

By Mónica Moncayo Escobar – “Role of impact investing in financing access to energy for off-grid populations in Sub-Saharan Africa.

Join His Excellency Dr. Bashir Ifo, President, ECOWAS Bank for Investment & Development, Ben Good, Chief Executive Officer, Energy4Impact and other impact investors to discuss how to deliver affordable, reliable and clean energy to over 600 million Africans, faster, at the 3rd Africa Impact Investing Leaders Forum taking place on 25th – 26th October, 2018 in London. Register interest here

The Global Partnership for Education (GPE) Financing Conference that took place in Dakar, Senegal in February 2, 2018 sought US$3.1 billion from world leaders to improve and modernise education on the African continent.  Donors pledged a total of US$2.3 billion for the next years.

Funding, however, is only the first step. A consensus is growing around the idea that to equip the next generation with adequate and relevant skills, we must also reform our education systems.

To compliment this, a proliferation of government and donor-funded projects on entrepreneurship have been set up to teach young people to be job creators instead of job seekers.

One cannot really argue with the current approach, but it falls woefully short of truly addressing the structural aspects of youth unemployment on the continent and disregards the economic structures that exist in most African countries.

In the Gambia, my home country, the ILO estimates that over 75 per cent of total non-agricultural employment is informal.  The World Bank estimates youth unemployment at 43.9 per cent and overall unemployment at almost 30 per cent.

These statistics are due to the formal sector’s inability to absorb enough working age Gambians – a problem that cannot be solved with entrepreneurship and education reform alone.

What The Gambia needs is investment in and promotion of labour-intensive manufacturing. According to the McKinsey Global Institute, sectors such as manufacturing and agriculture could “…speed up job creation [in Africa, and]…boost the number of new wage-paying jobs from 54 million on current trends to 72 million by 2020.” The IMF also noted that efforts to spur industrialisation through labour-intensive light manufacturing is showing positive results in Ethiopia. Despite Ethiopia’s success, the share of manufacturing as a percentage of GDP across the continent has stagnated at around 10 per cent.

For almost two decades, sub-Saharan Africa has seen unprecedented economic growth, but as AfDB President Adesina tweeted, “GDP growth is not enough. Growth must be felt in the lives of people!”

His tweet essentially summarises the need for a different approach, one that is more socially inclusive and improves the livelihoods of the masses. As UNIDO consistently argues, there is a “positive correlation between manufacturing and indicators of social inclusiveness.” As a result, industrial policies that centralise mass job creation, through manufacturing and industrialised agriculture must be pursued in order to avoid the “the real Malthusian crisis”.

Aubrey Hubry postulates that “…the need to generate employment for growing numbers of young people [in Africa] is unprecedented in human history.” Donor organisations, especially the European Union and UNFPA, have identified a link between the crisis Hubry describes in his Financial Times piece and the migration crisis. Both organisations have committed themselves to tackling what they call the economic roots of irregular migration across the Mediterranean.

However, their projects – for instance, the Youth Empowerment Project in The Gambia funded by the EU – do not provide enough capital, technical support or expertise, to address the root causes of poverty and youth unemployment in The Gambia and other African countries.

To conclude, we need to shift the paradigm away from the current status quo, to a tailor-made approach. As eluded to above, efforts to encourage entrepreneurship in The Gambia have had some success and they are essential, but as the founder of Taf Africa Global argues, “entrepreneurship cannot exactly be taught.”

Therefore, efforts to include it in curricula in The Gambia and across the continent are misguided – a move towards re-introducing vocational training in schools would be more suitable.

Funding schemes should be developed for large, scalable business ideas that have tangible potential for mass job creation. Realistically, manufacturing requires certain factors of production that are only available through foreign investment. Consequently, African governments should aim to shrewdly attract investment that secures knowledge and technology transfer, stable and decent employment, and stimulates structural transformation.

A holistic approach is needed though – succeeding with industrial policy requires the prioritisation of STEM (science, technology, engineering and mathematics) subjects in secondary and tertiary educational institutions. It also requires strategic investments in infrastructure, healthcare and as previous highlighted, vocational skills training.

This article is part of the #AfricaAtWork series, looking ahead to the 2018 LSE Africa Summit 20 and 21 April. Follow this link to secure your ticket.

Maudo Jallow (@maudojallow) is the founder of New Nation and former Co-Director of the LSE Africa Summit. He holds an MSc in African Development from the London School of Economics and Political Science.

The Main Objectives

Among other goals, such projects aim to achieve biodiversity conservation, sustainable water management, and clean transportation. The market reached a turning point in 2013 as the first corporate green bonds were issued, increasing the market size to $11bn. In 2016, over $81bn in green bonds were issued, driven in part by an increase in issuers, issue types, structures and investment vehicles.

Moody’s suggested that the global green bond issuance may rise to approximately $208bn in 2017.

This is indeed a very likely outcome as the expansion of green bond types and structures continues to attract multiple potential issuers, including China. The country is expected to contribute around $60bn in green bonds issued in 2017.

Other Players

In recent months, France and Poland became the first countries to issue sovereign green bonds. Countries likely to follow suit in 2017 include Bangladesh, China, Luxembourg, Morocco, Sweden, and Nigeria. Africa’s powerhouse, Nigeria, plans to be one of the first African states to float sovereign green bonds to fund sustainable projects in the economy.

At the Green Bonds Capital Market & Investors Conference, the acting President of Nigeria, Professor Yemi Asinbajo, stated that arrangements were being made for the inauguration of the first African Sovereign Green Bond, worth some 20 billion nairas, to address climate change and environmental projects.

Some of the projects to be financed include a solar unit distribution program for 20 states of the federation and a reforestation program for 26 states. With solar power becoming the world’s cheapest source of energy for electricity, this presents opportunities for investments and diversification, which could cut significant costs for organisations as the nation works towards bouncing back from recession. Whether or not the green bonds will be oversubscribed may depend largely on incentives and regulation of the bonds.

Putting the Money to Good Use

In November, Masen (Morocco’s Agency for Sustainable Energy) issued Morocco’s first ever green bond of €106m. The proceeds from the bond issue will be used to finance the development of 170 MW in the NOOR PV1 project, providing solar power through three plants.

Other African states, including Kenya, are gearing up to take be active in the green bond markets as they work towards supporting the 2015 pledge by world leaders to limit global warming to below 2 degrees Celsius this century.

A Positive Outcome

Apart from potential tax incentives, African states may be able to achieve more sustainable growth in relatively early stages of development in contrast to more developed states. The introduction of the issuance of green bonds increases the priority for sustainable development on the continent, thus encouraging African countries to avoid the mistakes (in sustainable development) that developed economies made in their infancy.

A potential challenge for African states hoping to attain finance for funds through green bonds is the size of the projects and their financing needs. The size of the projects may need to be increased in order to ensure that they are more attractive.

Although the issuance of green bonds is growing fast, it is still less than $1trn, a tiny fraction of the $90trn global bond market. OECD studies suggest that the global annual green bond issuance will need to rise by between $620bn and $720bn for the G20 to meet its climate change targets.

Other Considerations

The standards set for issuers of green bonds should also be considered. Higher standards may direct the efforts made by countries and organisations that hope to become issuers in the green bond market. They will encourage accountability and transparency that will promote more suitable allocation of capital to funding projects.

Critics cite the relatively weak reporting in the green bond market. Coupled with uncertainty on what constitutes a green bond, this may be a deterrent to investors.

Nevertheless, progress is being made in this regard. China and India have already led the way with unique guidelines to support the issuance of green bonds. Similarly, African states will benefit greatly from policy frameworks based on their distinct markets.

Conclusion

Sentiments regarding the sustainable development of economies continue to set the pace for organisations and policy makers in various countries across the globe who hope to remain competitive for investors and other stakeholders.

The numbers do not lie and a shift of winds has already taken place. Individuals and groups must adjust with urgency. Recently, the S&P Dow Jones Indices, the world’s leading provider of index-based concepts, data and research, announced the launch of the S&P Green Bond Select Index. It will measure the performance of green-labelled bonds issued globally.

The wave of change is here, but the real question to consider in the midst of this change is: who will ride it with grace?

By Calvin Ebun-Amu, Sector Specialist

According to a case study on alternative sanitation for water security done by Tomorrow Matters Now, 19.5% of South Africans are still without an improved sanitation service and 4.9% of South Africans have no access to sanitation.

For 60% of water management systems, water demand is overtaken by supply, while 98% of our available water resources are already being used. At the same time, South Africa’s water and sanitation infrastructure is crumbling because of a chronic lack of investment.

Local municipalities are faced with these challenges and its effects on a daily basis.

Some of these include the age old problems of institutional or financial shortcomings and capacity constraints, a delay in sanitation services linked to a delay in housing, and the continued maintenance and improvement of basic sanitation.

Waste management has also become an increasing problem with water treatment plants having released raw sewage into rivers in the past due to poor management and maintenance backlogs.

The case study found the need for alternative means of sanitation.

Providing universal access to conventional waterborne sanitation is one of government’s biggest challenges, and the critical aspects of hygiene and dignity, as well as a healthy and resilient environment need to be addressed.

The study said that ‘flushing’ cannot be the solution as we cannot continue to use clean, portable water to flush waste. “We need game-changing new technologies which require little or no water,” the findings suggested.

Technology

The study suggested that alternative means of sanitation require low-water and no-water systems, low-energy wastewater treatment, sustainable operations and maintenance, and be an adaptable, integrated system that can ‘click into place’.

The Arumloo micro-flush toilet was cited as an example as it only uses 1 litre of water.

Biokube, a Danish company, was said to be a reputable in building decentralised waste-water treatment plants which have been implemented in more than 43 countries. Its “strength lies in scalability from household level, to resorts, to small cities,” the report said.

Partnerships

The development of a viable partnership model involving the combined efforts of governments, communities, citizens, civil society and the private sector is critical for success, the study added.

It also noted the following factors as crucial for success:

• Community involvement/mobilisation
• Stakeholder feedback loop: representation of the community’s needs, and education around/exposure to project developments
• Citizens themselves as early adopters
• Move forward together on an equalised journey towards improved sanitation

Johannesburg eliminating backlogs

In response to ageing water systems in South Africa, the City of Johannesburg has commenced with an Infrastructure Renewal Plan costing R1 billion a year to increase the renewal rate from 1% to 3.5% to eliminate backlogs.

Similar plans are in place for water-and sewer infrastructure throughout the country.

Industry experts have asked whether it will be possible to maintain demanding and costly water technologies, as perhaps alternative sanitation systems could provide an answer to these issues, offering low-water flush solutions or alternative sanitation technologies that use no water at all.

There are a wide range of improved technologies available in the industry that provide safe, hygienic, and sustainable sanitation at various costs and levels of complexity, the report pointed out.

It concluded by saying that these types of alternative sanitation technologies promote water security through the recovery of potential resources, unlock business potential for entrepreneurs and create incentives for future job creation.

By Riante Naidoo

Never in Africa have these words uttered by Nelson Mandela, an African icon, rung as true as they do presently.

We are two years into the implementation of the sustainable development goals (SDG) to achieve food security, combat poverty, create jobs, enhance equality and peace, enhance resource efficiency, combat climate change and protect the environment as critical priorities in Africa.

The writing is on the wall. And just as colonial oppression drove our founding fathers to launch the independence struggle, today the urgent need to accelerate the continent’s socioeconomic transformation beckons us all, as citizens of the current generation, to action. The time to do the right thing and act is now and in so doing, the next generation of continental icons will emerge.

Unlocking the enigma of Africa’s next icons

Three distinctions position clean energy and Ecosystem Based Adaptation (EBA) Driven Agriculture as catalytic sectors in Africa.

First is economic inclusion. Agriculture is the most accessible economic sector that employs the majority of Africa’s work force, at an average of 64 percent across the continent. Maximizing the productivity of this sector means enhancing income and economic opportunities for the majority in the continent.

Secondly, Africa holds a comparative advantage in terms of resources, with 65 percent of the world’s uncultivated arable land and a 300-million-strong middle class demanding more value added and differentiated agro-products and projected to grow a food market worth $150 billion in the next 13 years. This represents a significant domestic consumer market for growth of local value addition agro-industries. On energy, is the abundant renewable energy potential including hydro estimated at 1852TWh annually, 3 times the continent’s current demand, and the best solar resource in the entire planet. By leveraging these resources in complementarity, the region can establish global competitiveness, and create the much needed jobs.

Third, focus on policy and non-policy investment to maximize productivity of these sectors serves the leading socioeconomic development priorities of food security, enhanced income and job opportunities. To maximize this productivity, development in these sectors needs to be considered as complementary and not in silos as classically approached.

This amalgamation will potentially maximize productivity of agriculture by cutting post-harvest losses (PHL) largely driven by lack of value addition. It will incentivize use of EBA and clean energy to offset carbon and enhance ecosystems, thus further cutting crop losses due to climate change and those due to ecosystems degradation. Amalgamation will also maximize productivity of clean energy development by diversifying application beyond domestic use to include productive use in agro-processing and value addition.

For example in Kenya, estimates show that cumulatively, on-farm value addition using solar powered, efficient micro-irrigation is saving farmers over $10,000 annually in operating costs relative to using conventional fossil fuel powered, non-efficient farrow systems. As a result farmers are generating up to $30,000 per acre annually. What is needed for impact across the continent are policy and non-policy incentives and investments to upscale this paradigm. It is in this upscaling that the long-awaited solutions to sustainably accelerate socioeconomic transformation will emerge. And in the process, create the next generation of continental icons.

Moving from talk to action – The Ecosystems Based Adaptation for Food Security Assembly (EBAFOSA)

EBAFOSA is already committed to upscaling through innovative volunteerism. This volunteerism seeks the application of physical and non-physical resources at one’s disposal – especially professional skills, organizational and professional networks, and ongoing initiatives – to build mutual partnerships with complementary actors at policy and operational levels. That’s to enhance the respective business or organizational objectives, like expanding market share, transferring skills and technology, or operationalizing policies, but aligned to the shared EBAFOSA strategic objective. This strategic objective is to bridge policy and operational gaps to maximize the productivity of both clean energy and nature-based, EBA-driven agriculture to sustainably accelerate socioeconomic transformation and achieve the SDGs.

Through innovative volunteerism, EBAFOSA is maximizing agricultural productivity. These innovative volunteerism efforts are being applied at the EBAFOSA pillars: amalgamation; policy harmonization; standardization; innovative financing, and ICT as driver of partnerships. To date, a number of achievements can be recorded across Africa.

Amalgamation, where clean energy expansion is tagged directly to powering value addition of sustainably produced agro-products (rather than undertaking them in silos) is the EBAFOSA foundational pillar. For example in the northwestern part of Cameroon’s Jakiri municipality, EBAFOSA is catalyzing partnerships at policy and ground level towards directly linking off-grid small-hydro to power cassava and Irish potato processing into varied product lines, and linking these to markets and supply chains using ICT mobile apps.

This is not only offsetting carbon in energy generation and building ecosystems resilience, but creating income opportunities along the entire agro-value chain and ancillary chains of clean energy and ICT. A total of 10 youth groups engaging in ICT, clean energy and marketing have been creating green jobs for approximately 100 young people. Over 500 women now have access to value addition services and as a result have cut their PHLs to enhance income stability and the community food security.

On policy harmonization to maximize productivity, EBAFOSA is achieving this through ministerial-level collaboration across ministries of agriculture, environment, energy, industrialization and others that are forming interagency policy task forces. These policymakers are further joined by stakeholders from private sector and the development community to share knowledge and experiences in aligning policy – all achieved through innovative volunteerism.

The EBAFOSA Sierra Leone task force has started building on some ongoing policy initiatives across four complementary ministries. A key focus for the Sierra Leone task force is tax concession policy for agro-based industries in rural areas. These are set to incentivize investment in clean energy power plants dedicated to adding agro-value near farming areas, and the task force work is another example of what innovative volunteerism is doing at policy level.

On innovative financing, EBAFOSA is reducing key factors of climate risk (driven by climate change-induced crop failure) and financial risk (driven by repayment defaults) to catalyze affordable private-sector lending along the EBAFOSA value chain.

For example, in Kenya, EBAFOSA Kenya stakeholders are working with the Kenya county governments to leverage county climate change funds for additional private sector resources. In the pioneering Makueni County, the fund is setting aside 50 percent of the portfolio so it can securitize up to 10 times the amount in private banks. These securitized monies will be loaned through low interest microfinance institutions, as a priority to entrepreneurs engaged in actions that optimize the agro-value chain using EBA and clean energy. Therefore, they indirectly finance the upscaling of EBA-Driven Agriculture and clean energy agro-value addition to create multiple low carbon, higher order income and job opportunities.

On ICT as a driver, the EBAFOSA-driven ICT app called EdenSys is enabling farmers to use their mobile phones to access advisory services, to access inputs including clean energy, and to connect to markets where they can price and sell their products among other key actions.

Going forward, a dedicated service to finance products and services along the entire EBAFOSA chain called M-eBAFOSA is being developed and this will be a one-stop-shop financing module. It’s a doorway that links end users and clients interested in financing along the EBAFOSA chain, to the relevant product and service providers also within that chain, be it advisory services or technology for EBA/clean energy, EBAFOSA compliance standards, or finance providers.

These are samples of how EBAFOSA is upscaling the paradigm that will potentially create the next generation of icons across the continent. Innovative volunteerism provides an opportunity to engage more people to cash on this paradigm, and be on track to clinching the prize of next generation continental icons.

Conclusion

“When you follow in the path of your father, you learn to walk like him.” This Ashanti proverb provides a lesson for Africa’s next potential icons. The first generation of continental icons arose out of solving Africa’s main challenge at infancy – the struggle for self-determined rule. Their dedication and determination to liberate the continent from the shackles of colonialism is what elevated them to status of icons.

At present, Africa faces the urgent need to accelerate socioeconomic development sustainably and catch up with the rest of the globe in actualizing the SDGs and implementing the Paris Climate Change Agreement. Innovative volunteerism towards maximizing productivity of the continent’s catalytic sectors of EBA Driven Agriculture and Clean Energy stands out as an opportunity to accelerate this development.

Learning from the first generation of icons, our dedicated and determined efforts in operationalizing innovative volunteerism make possible this generation’s ascent as “continental icons” of Africa’s future. This is our time as the current generation and Innovative Volunteerism through the framework of EBAFOSA provides the opportunity to do so.

By Dr. Richard Munang

The Business Commission’s global report, first launched in January 2017 ahead of the World Economic Forum in Davos, shows how sustainable business models could open economic opportunities across 60 “hot spots” worth up to US$12 trillion and increase employment by up to 380 million jobs by 2030. More than half of the total value of the opportunities are in developing countries. In Africa alone, sustainable business models could open up an economic prize of at least US$1.1 trillion and create over 85 million new jobs by 2030.

“The world is seeing increasingly that African companies are models for what can be achieved with ingenuity and innovation as they solve difficult social challenges. They are not wedded to old solutions, so here in Kenya we see digital innovators delivering banking, energy and health solutions. The speed of innovation and adoption is astonishing,” said Mark Malloch-Brown, chair of the Business and Sustainable Development Commission. “The Better Business, Better World report launch in Nairobi puts the African private sector squarely in the drivers’ seat on the road to achieving sustainable development, and we welcome more African business leaders to join the Business Commission.”

Hosted by Safaricom, the Better Business, Better World conference, held on 23 February, brings together business leaders to build support for the Sustainable Development Goals (or Global Goals)—17 objectives to eliminate poverty, improve education and health outcomes, create better jobs and tackle our key environmental challenges by 2030. The purpose of the conference is to show how the Global Goals provide the private sector with a new growth strategy that opens valuable market opportunities while creating a world that is both sustainable and inclusive. And the potential rewards for doing so are significant.

Kenya’s top mobile network operator, Safaricom has also been a leader in creating innovations that remove obstacles to financial inclusion through its mobile banking platform M-PESA, and increases sustainable energy access through M-KOPA. “Africa has a real opportunity to lead the way in doing better business for a better world. As a commission we have found that across the continent, there is potential for inclusive, green growth and development which remains untapped,” said Bob Collymore, CEO of Safaricom and member of the Business Commission. “We stand on the cusp of possibilities and we must seize the opportunity now. As the report shows, there have been in the last few years a demonstration of the possibility of leapfrogging development through new technologies and the Internet to bring development in transformative ways that also promote purpose.”

A key message of the report is that digital solutions and entrepreneurs will be critical to unlocking many of these new opportunities. Research from the report has identified 32 ‘development’ unicorns with market caps of more than US$1 billion. In Africa entrepreneurs are bringing new solutions to social and environmental problems in remarkable ways, and the opportunities to do so are compelling. One market hot spot, affordable housing, could create over 13 million of these jobs, while risk pooling, the single largest monetary opportunity in Africa, is valued at US$150 billion.

“We need young entrepreneurs to reimagine solutions that would allow business to participate in joining government to solve issues of poverty and hunger that the SDGs seek to address,” said Vineet Rai, founder, Aavishkaar-Intellecap Group and a member of the Business Commission. “Sankalp Forum and Intellecap are bringing together the best young entrepreneurs from Africa and Asia to find new ideas and solutions that aim to deliver on the ambitious opportunity that the Better Business Better World report outlines as US$12 trillion.”

At the same time, the Commission believes a “new social contract” between business, government and society is essential to defining the role of business in a new, fairer economy. The 2017 Edelman Trust Barometer reinforces this idea. It shows that while CEO credibility is sharply down, 75% of general population respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” And they can do so in ways that align with recommendations and actions outlined in Better Business, Better World: rebuilding trust by creating decent jobs, rewarding workers fairly, investing in the local community and paying a fair share of taxes.

Throughout 2017, the Commission will focus on working with companies to strengthen corporate alignment with the Global Goals, including: mentoring the next generation of sustainable development leaders; creating sectorial roadmaps and league tables that rank corporate performance against the Global Goals; and supporting measures to unlock blended finance for sustainable infrastructure investment. “We need to show these ideas work not just in a report but on the business frontline,” said Dr. Amy Jadesimi, CEO of LADOL, a Nigerian logistics and infrastructure development company, and a member of the Commission.

Culled from Business & Sustainable Development Commission.

These foreign investors, foundations and trust managers are through their investment addressing significant challenges that Africa faces in respect of poverty, infrastructure development, healthcare, education and transport by supporting companies dealing with these issues on the continent. Initiatives in these sectors are considered to be viable impact investment opportunities, and investors are seeking them out. Impact investments are those investments that provide a measurable social or environmental impact, as well as a financial return.

Much of the work in impact investing markets is starting to look at how money invested in social and environmental good could be allocated in a way that uses data to determine the effectiveness of programmes and institutions. One of the innovative financing mechanisms to emerge from this process is the Social Impact Bond.

A Social Impact Bond (SIB) is a financing contract designed to drive commercially sustainable social outcomes. The bonds work by attracting socially motivated investors to fund social services up front. Repayments to investors are then made by government and/or private funders if pre-agreed outcome targets are achieved. SIBs enable governments and donors to allocate resources more effectively to address societal challenges particularly in the face of fiscal austerity, by way of public-private collaboration.

The use of SIBs stands poised for considerable growth in Africa. The magnitude and speed of this growth depends on the extent to which African governments create an enabling environment through policy. In this regard, South Africa has a relatively established social investment market, albeit small by international standards, facilitated to some extent by Regulation 28 of the Pension Funds Act, an example of how policy can be used to leverage institutional investment towards social outcomes.

Regulation 28 is the prudential investment regulation that governs how and where South African pension funds can invest, and it obliges pension fund trustees to consider environmental, social and governance factors in pursuit of a sustainable returns policy. It expressly incentivises institutional investment into the rest of Africa. Similarly, there are regulations in several African jurisdictions that allow, even compel, domestic pension funds to invest in other African countries.

Larger African institutional investors are quite familiar with other initiatives to strengthen awareness and implementation around ESG and responsible investing, for example, the UN Principles for Responsible Investment (UNPRI), the closely aligned Code for Responsible Investment in South Africa (CRISA) the Responsible Investment Ownership Guide for Pension Funds in Southern Africa published by the Sustainable Returns for Pensions and Society initiative in 2013. Zimbabwe also introduced responsible investment codes recently and Kenya implemented its stewardship codes last year.  The King Code IV has also placed emphasis on corporate social responsibility and has referred to CRISA.

The regulatory environment in South Africa has arguably led to the increased interest from foreign foundations, looking to invest or create investment opportunities in projects in South Africa and to expand them into Africa. These projects involve many industries, (although we have seen particular enthusiasm in the healthcare and agriculture sectors), with the need for legal advice on all levels.  Exchange control rules often have to be adhered to, when the funding initially enters South Africa, and for any subsequent investment abroad. These constraints dictate the structure of the deal and the flow of funds and make legislative advice a pre-requisite.

Foreign investors also frequently look for partnerships with local companies that have the expertise, the location and the know-how to address socioeconomic issues. In South Africa, the obstacles faced by load shedding as a result of energy capacity issues, for example, have given rise to many businesses offering renewable energy and solar energy solutions – which in turn offers more ESG friendly investment opportunities for local institutional investors.

In the alternative energy market, measuring the return on investment is becoming relatively straightforward. However, it is less easy to put a price on investing in human dignity or cognitive development in children, for example. One of the sticking points in the impact investing movement has been how to gauge if funds invested in social good are having any measurable impact.

Earlier this year the Western Cape Departments of Health and Social Development in South Africa allocated up to R 24 million to trial three Social Impact Bonds (SIBs) aimed at improving the health, nutrition and developmental status of pregnant women and children, up to five years who live in low income communities. Two corporate donors have committed another R 24 million rand to bring the total amount of the bonds to R48 million.  The Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town’s (UCT) Graduate School of Business, facilitated their development and Bowmans advised on the legal and tax structuring of these SIBSs.

These SIBs are the first to be initiated in an emerging market, and they will provide useful guidance and lessons on how these bonds can be implemented in other countries in Africa going forward. This innovative financing mechanism could be a powerful tool providing a practical and workable solution for Africa’s most pressing challenges, while at the same time offering worthwhile returns for socially motivated investors.

By David Geral and Kim Goss, of Bowmans South Africa, and Aunnie Patton of Bertha Centre

FinComEco, a fully integrated Financial & Commodities Ecosystem launches today providing services, financing, capacity building and enablement solutions.   The ecosystem will drive improvements in food security, economic diversity and financial inclusion through a socially responsible commercial delivery partnership. The goal is a sustainable and increasing improvement in the sophistication and living standards of smallholder farmers and their families in developing countries brought about by a venture, which links agriculture to the latest financial technology. It will initially focus on Africa.

“Creating markets, developing infrastructure and providing financing for farmers are key ingredients for transforming agriculture in Africa. These factors were necessary for transforming agriculture into a wealth-creating sector, generating income opportunities for farmers in rural areas .” – The African Development Bank (Note1)

Rt. Hon Mark Simmonds, Chairman of FinComEco, former UK Foreign & Commonwealth office Minister with responsibilities for Africa, the Caribbean, UK Overseas Territories, International Energy and Conflict Prevention, comments, “It is important to recognise each African country is unique with individual economic, political and social drivers.” He added “With FinComEco I believe we have a detailed strategy to support, improve and facilitate the full agricultural value chain improving lives, creating jobs and alleviating poverty.”

FinComEco will encourage growth by connecting the farmer with the exchange, financial infrastructure and national economy. This supply to demand chain also includes small-scale traders, brokers, storage, transportation, shipping, banks and buyers including multinationals. This will enable smallholder farmers to get a better price for their produce, and provide opportunities for further income growth, opening alternative added-value opportunities including e-commerce enabled enterprise.

FinComEco has already successfully proven this concept in Malawi at the Agricultural Commodity Exchange for Africa (ACE) through the GMEX Group. During 2016 substantial benefits were delivered to smallholder farmers with an average 31% increase in income from use of warehouse receipts and better price transparency with 47,000 registered to receive the latest market prices on their mobile phones.

FinComEco will either establish or reinvigorate local commodity exchanges underpinned by trading technology, electronic warehouse receipts and a complete mobile banking solution. It will also enable trade across multiple regions and deliver a holistic secure cloud-enabled financial agri-ecosystem in partnership with development organisations, governments, research bodies and the private sector.

Hirander Misra, Founder and Deputy Chairman of FinComEco and CEO of GMEX Group commented, “The aim of FinComEco is to match exchange trading capability, including derivatives, to physical growers. Also to add value through enabling manufacturing, support services and delivery contributing to additional local employment.” He added, “The initiative will allow smallholder farmers to thrive, enabled by best of breed technology, standards and inputs (including seeds, fertilisers and pesticides). This is coupled with a unique Agri-finance business model to solve credit and financing issues underpinned by improvements in logistics and warehousing.”

Steve Round, Director of FinComEco, CEO at Saescada and Chair at The Big Issue Foundation and Ecology Building Society commented, “There are massive financial inclusion and food security issues across the developing world with not enough being done in a cohesive fashion to address some of them,” he added, “I am delighted that our mobile electronic banking and payments system can add real value, in this unique integrated solution, to many millions of farmers delivering against many of the United Nations Sustainable Development Goals.

FinComEco is currently being syndicated out to strategic investors. Additional announcements on this and further Board and Management appointments will be made in due course.