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Sustainable businesses key to attaining SDGs

Monday, February 24th, 2020 06:26 | By

By Karnika Yadav       

As countries struggle to attain the Sustainable Development Goals (SDGs) by the 2030 deadline, various things have stood out on strategies adopted.

The slow pace of achieving the goals has primarily been a consequence of putting all our eggs in one basket and expecting the State to deliver the SDGs single-handedly.

Funding has also proved an obstacle, with the SDG Centre for Africa estimating the financing gap to achieve the SDGs to be between $500 billion (about Sh50 trillion) and $1.2 trillion (about Sh120 trillion) a year.

That is simply beyond the reach of the public sector, yet delivering basic functions such as health care, education, water, energy, and road infrastructure requires over 50 per cent of the GDP of most African countries. 

Sustainable businesses, therefore, remains the key  to achieving the SDGs. For the private sector, pursuing the goals of eradicating hunger, poverty and inequality, and improving healthcare will deliver its own rewards, creating business opportunities worth billions of dollars. In the absence of that private sector mobilisation, progress remains slow. 

The 2019 SDGs Three-Year Reality Checker Report found only five countries in Africa—Seychelles, Mauritius, Morocco, Egypt and Algeria—that had met the SDG target of three per cent poverty by 2015. 

Yet the problem is substantially one of mind-set. For, while achieving the right policies and public investment is necessary for delivering the SDGs, we need to focus more on developing SDG-aligned businesses. 

It is not viable to expect states to achieve a tax take or a debt load of 50 per cent of GDP to deliver basic services when the continent is home to a vast informal sector that contributes little government revenue. That bill cannot be met without a leap forward in business and GDP growth.

And just as public sector SDGs’ success depends on private sector take-off, so, too, does the private sector’s success.

Investing in SDG-focused businesses, calculates the UN, would create over 85 million jobs in Africa by 2030, which would in turn create new consumers and new markets.

Indeed, even relatively small investments in SDG-focused businesses can produce huge returns. For instance, investing in agriculture technology to reduce food waste could generate $57 billion (about Sh5.7 trillion) a year in additional revenues, based on evidence from Rwanda, where small metal silos or plastic crates have reduced post-harvest losses by over 60 per cent and increased smallholder farmers’ income. 

If private businesses collaborate with local governments to provide larger infrastructures, such as ports, oil and gas extractives, power plants and automotive, shared revenue of over $296 billion (Sh29.6 trillion) could be generated and nearly 16 million jobs created, according to the UN estimates. 

Likewise, providing affordable housing, clean water and sanitation, infrastructure and energy solutions, such as solar lanterns and improved cooking stoves to urban dwellers, has a potential revenue value of $214 billion (Sh21.4 billion) a year and could create over 32 million jobs. 

Such growth is typical for businesses focused on achieving SDGs. Indeed, research conducted by the Business and Sustainable Development Commission shows that business that is focused in SDG areas also achieves more value locally.

Overall, business models that are directed towards achieving Africa’s SDGs benefit of both consumers and businesses, which is why they are at the heart of our work at Intellecap and at next week’s seventh Sankalp Summit for entrepreneurs in Nairobi.

—The writer is Associate Partner,  Business Consulting and Research at Intellecap

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