Category: Development finance

Africa, Development finance, Reviving multilateralism

To fix Africa’s debt crisis, reform credit ratings 

By Daniel Cash, Associate Professor at Aston University and Senior Fellow at the UN University Centre for Policy Research 

Africa is in a debt crisis. On the continent, interest payments on debt have risen by 132% over the past decade. Thirty-two African countries now commit more to servicing debt than they do investing in healthcare, and 25 spend more on debt than education. In September, UN Secretary-General António Guterres warned about the potential of social unrest across Africa due to lack of access to effective debt relief. Past debt crises in Africa have been met with internationally co-ordinated responses, but this time, similar efforts have failed.  

Continue reading “To fix Africa’s debt crisis, reform credit ratings “
Development Matters
Development finance, SDGs

Can a focus on scaling help transform development co-operation?

By Benjamin Kumpf, Head of the OECD Innovation for Development facility

As we are all too aware, the world is off track to achieve the Sustainable Development Goals (SDGs) by 2030. Progress will require major changes in policy, regulation, infrastructure, procurement, and planning, as well as social and behavioural shifts. And it will require a major increase in financing: the UN’s Financing for Sustainable Development Report 2024 puts the SDG investment and financing gaps at between USD 2.5 trillion and USD 4 trillion annually.

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Development Matters
Desert
Climate change, Development finance, Food security, ODA

Financing the Fight Against Desertification

Desertification, land degradation and droughts (DLDD) often go overlooked compared to other global crises linked to climate change or biodiversity loss, yet they devastate ecosystems, livelihoods and food security for billions worldwide. As policymakers gather in Riyadh from 2 to 11 December 2024 for the sixteenth Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification (UNCCD), this is an important opportunity to raise ambitions, scale up resources and strengthen global co-operation to tackle these challenges. Continue reading Financing the Fight Against Desertification

Development Matters
green finance, multilateral development finance report
Development finance, ODA, Reviving multilateralism

Reforming multilateral development co-operation in a changing world

How can we build a more effective multilateral development system to tackle global challenges? This question was central to the OECD Multilateral Development Finance Week (23-29 September 2024), which brought together experts from 14 different countries to discuss how multilateral organisations can adapt to new mandates and the changes in global development finance approaches. Continue reading Reforming multilateral development co-operation in a changing world

Development Matters
Currency risk climate finance development
Development finance, Green transition

Currency risk is stifling climate finance for developing countries. It should – and can – be mitigated

By Ruurd Brouwer, CEO, TCX, and Barry Eichengreen, Professor of Economics and Political Science, University of California, Berkeley

Private-sector funding will be essential for raising the trillions of dollars needed to finance climate-change abatement and adaption projects in emerging and developing countries. The question is: will that finance be forthcoming? 

Continue reading “Currency risk is stifling climate finance for developing countries. It should – and can – be mitigated”
Development Matters
Development finance, Reviving multilateralism

Donor countries should use IDA20 to address a blind spot in development finance

By Creon Butler, Research Director, Trade, Investment and New Governance Models, and Director, Global Economy and Finance Programme, Chatham House and Harald Hirschhofer, Senior Advisor, TCX

Developing countries need external finance on a very large scale to meet the Sustainable Development Goals; the COVID-19 pandemic has not only increased the amount they need but also made it harder to access private funding. This makes public Development Banks more important than ever, especially to catalyse investments by pension funds and other institutions in socially productive assets.

Continue reading “Donor countries should use IDA20 to address a blind spot in development finance”
Development Matters
Development finance, Green transition, New social contract, ODA, Reviving multilateralism

Frontloading finance can save lives, tackle climate change and generate real impact

By Sony Kapoor, CEO of the Nordic Institute for Finance, Technology and Sustainability (NIFTYS) and Chair of Re-Define

The humanitarian, moral and economic case for development aid has been made eloquently and does not bear repeating. But the stark, ongoing highly inequitable impact of climate change and the COVID-19 pandemic, both of which hurt poor and developing economies the most, has turbocharged the case for more aid and now. However, present levels of aid languish at 0.32% of GDP, or $161.2 billion, less than half the promised amount of 0.7% of GDP. This commitment needs to be at least doubled, but despite the OECD call for a “massive expansion of aid” countries such as the UK are cutting, rather than increasing aid. 

Continue reading “Frontloading finance can save lives, tackle climate change and generate real impact”
Development Matters
Africa, Development finance

Mapping development assistance to small arms control: why does it matter?

By Giovanna Maletta and Lucile Robin, Stockholm International Peace Research Institute (SIPRI)

Small arms, large impacts

Widely available and easy to conceal, small arms and light weapons (generally referred to as SALW) are easily trafficked and acquired both in times of war and peace. This can negatively impact the development of a country in many ways. Among the most directly identifiable effects are the deaths and injuries they can cause, which can increase financial pressure on households, communities, and health systems. In Zambia, treating a patient for gunshot wounds costs more than $100, which represents approximately ten times the cost of treating a patient with malaria. Small arms proliferation can also indirectly fuel conflicts and armed violence, force displacement, reduce economic opportunities, and limit access to healthcare and education.

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Development Matters
Covid-19, Development finance

Mobilising investment to sustain economic recovery: what can impact investors do?

By Alberto Bernardini, Sustainable Finance Director, GreenWave

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Private investment in sustainable development has been on the rise in recent years. Impact investments differ from traditional investments as they aim to generate positive, measurable impacts on society and on the environment, in addition to being financially profitable. According to the Global Impact Investing Network’s (GIIN) annual impact investor survey, close to 300 impact investors worldwide collectively managed USD 404 billion of impact investment assets in 2019. This is almost double the USD 228 billion worth of assets under management by 200 impact investors in 2017. Moreover, the rapidly growing impact investment market could provide the capital needed to address the world’s most pressing challenges in areas like sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services such as housing, healthcare, and education. 

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Development Matters
Development finance, SDGs

Public development banks: gateways to transformative SDG financing

By Maria Alejandra Riaño, Research Fellow, Governance Programme, Institut du Développement Durable et des Relations Internationales IDDRI

Public development banks around the world can play a vital role in minimising economic decline, supporting recovery and financing structural transformation. To fulfil this role, they need to fully capture the interconnected and transversal nature of the 2030 Agenda and align their practices, operations and investments accordingly. It is not just a matter of marginally adjusting strategies and processes – public development banks need to deeply reshape behaviours and investment practices.

Scaling up public development banks’ alignment with the 2030 Agenda

Public development banks have certain advantages that position them at the forefront of the vast network of actors responding to the socio-economic impacts of the COVID-19 crisis and seeking to chart a course towards a transformative recovery. Public development banks have become an essential and complementary voice for traditional co-operation and commercial investors due to their detailed knowledge of the specific context in each region or country, and unmatched flexibility in the design of concessional loan programmes.

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Development Matters