Investing in the improvement of digital access in Africa, could be the silver bullet to achieving the SDGs, a recent report has said.
While many investors, corporations and financial institutions say they are committed to achieving the SDGs, the report notes that capital is not flowing at the required speed to the countries where SDG investment matters most.
According to a report dubbed ‘Opportunity2030 the Standard Chartered SDG Investment Map’, rapid industrialisation and urbanisation in low-to middle-income countries make water and sanitation one of the most important areas for public and private investment.
“Well-structured investments in this sector benefit from stable long-term returns with limited downside volatility. This is also an excellent sector for impact investing, as the potential social effects are so positive. Improved water supply and sanitation, alongside better management of resources, is a key lever for improving markets’ economic growth. However, social infrastructure projects in emerging markets typically require long-term concessions with government-linked entities. To increase chances of success, investors should work closely with host governments, local utility companies, export credit agencies, multilateral development organisations and institutions with long track records in the market, said Mr James Cameron, Global Head, Power, Utilities, Infrastructure, Standard Chartered.
In emerging markets alone, the UN estimates USD3.9 trillion per year will be required to reach all 17 goals by 2030. At the current rate of investment, the UN has calculated a gap of USD2.5 trillion per year.
Among the countries in the study, access levels vary from 34 per cent (Uganda) to 55 per cent (Nigeria) in Africa, and between 73 per cent (Bangladesh) and 99 per cent (Thailand) in Asia, representing a significant opportunity for the private sector to help achieve and maintain universal access.
The study specifically analysed five African countries namely Ghana, Kenya, Nigeria, Uganda and Zambia.
Findings of the report:
- Providing universal digital access represents the greatest investment opportunity for the private sector by 2030 (USD74.5 billion), followed by universal access to power (USD65.8 billion), transport infrastructure (USD46.4 billion) and access to clean water and sanitation (USD10.3 billion)
- The biggest single opportunity across the African markets in the study is in increasing digital access – a combination of mobile phone subscriptions rates and internet connectivity – in Nigeria (USD47.4 billion). Driven by its large and growing population, Nigeria also offers the greatest overall opportunity across the SDG indicators measured (a total of USD114.2 billion), followed by Kenya (USD40 billion)
- Zambia and Kenya present a big opportunity to make an impact on SDG 6 (Clean Water and Sanitation): With an average of 43 per cent and 56 per cent of the population respectively currently lacking access to clean water and sanitation, there is a USD0.7 billion and USD2.3 billion private-sector investment opportunity to help close the gap by 2030
- Uganda presents a meaningful opportunity to make an impact on SDG 7 (Affordable and Clean Energy): with just 22 per cent of the population that have access to electricity, there is a USD6.1 billion private-sector investment opportunity to help achieve universal access by 2030
- The greatest investment opportunity in Ghana is in achieving and maintaining universal access to electricity (a key SDG 7 indicator), representing a USD7.8 billion private-sector opportunity
According to Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered, the UN Sustainable Development Goals are amongst the most ambitious projects humanity has ever attempted. As well as offering our best hope yet of tackling the world’s most serious challenges, they also offer a unique opportunity for the private sector.
“For the goals to be met in Africa, the private sector must play a central role in deploying capital to get projects off the ground. Opportunity2030 provides a map of these opportunities, revealing the sectors and markets where investors can best contribute to the SDGs whilst achieving sustainable returns.
“Currently, not enough capital is reaching the countries that need it the most. With the UN’s 2030 deadline for achieving SDGs just 10 years away, the time to act is now.” He added.
With Standard Chartered’s experience and reach into Africa, the Bank uses banking knowledge, products and its unique footprint to fund sustainable development where it matters most. In June 2019, we launched our first Sustainability Bond, raising EUR 500 million to fund projects aligned to the SDGs in emerging markets, and have worked with clients and partners to create a number of important landmark structured solutions to support the SDG’s.
The Bank has also launched its digital bank in nine markets in Africa, as part of the Bank’s digital transformation strategy for Africa. The digital banking solution provides Standard Chartered customers with affordable, fast and easily accessible banking services that is supporting financial inclusion in the markets.