Three things we have learned about investing in African small businesses and in fragile countries
By Jean-Michel Severino, CEO of Investisseurs & Partenaires
Africa’s small and medium businesses (SMEs) form what is often called the “missing middle” of African economies. The smaller the investment ticket is, the higher the transaction and monitoring costs are, reducing the net profitability for investors. In addition, the poorer and more fragile the country is, the riskier the investments are. These are well-known facts amongst private equity professionals. Small businesses require small investments but also long gestation periods, as well as sizeable personalised financing and access to specific expertise and knowledge. Fragile countries require in-depth knowledge of the environment in all its dimensions to make wise choices. This is why so few investors are willing and able to finance small African businesses and invest in complex local situations. The choice of supporting these businesses and investing in fragile countries is primarily a choice of impact. It implies several adjustments to ensure the sustainability of the investment fund.
Política 2.0. Combinando la protesta con la propuesta
De Max Trejo, Secretario General, Organismo Internacional de Juventud para Iberoamérica (OIJ)
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Las formas de participación política juvenil son múltiples, dinámicas e interconectadas y demandan una comprensión de lo político amplia y flexible para no subestimar el compromiso de las personas jóvenes con la transformación. Por ejemplo, uno de los puntos destacados en los análisis sobre el tema es el bajo involucramiento de la población joven en los procesos electorales. En este sentido, el Informe Mundial sobre Juventud de la ONU (2016) señala que en los 33 países consultados sólo el 44% de la población joven “siempre vota”, frente al 60% de adultos.
En Iberoamérica, donde las juventudes representan más del 25% de la población, la situación no es diferente. Por citar algunos casos, en México, que tendrá elecciones presidenciales en 2018 y donde las y los jóvenes representan el 30% del padrón electoral, el registro histórico muestra que, aunque la participación de quienes votan por primera vez es del 69%, ésta disminuye al 53% entre los 20 a 29 años (INE, 2016). A su vez, en Chile, que experimentó el mismo proceso en 2017, la tendencia muestra que las juventudes tienen la participación electoral más baja de la población, aportando cerca del 34% del total de la abstención (PNUD, 2017).
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Unpaid care and domestic work – a global challenge with local solutions
By Clare Bishop, Senior Consultant for the OECD Policy Dialogue on Women’s Economic Empowerment
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The pervasive issue of unpaid care and domestic work in the global fight against gender inequality presents itself in many different contexts and guises. Yet, the one constant thread is the impact of unpaid care and domestic work on time availability. The disproportionate workload borne by women –that hinders their full engagement as economic actors in paid employment, their participation in education and training, and their overall quality of life – is widely recognised. Solutions are diverse. They include technological ones to improve water supplies and save time and labour. They embrace policies and practical ways of providing childcare facilities and paternal leave. And they call for addressing cultural norms underlying the unequal gender division of labour for unpaid work.
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Seizing Opportunities to Sustain Peace: A Road Map
By Sarah Douglas, Deputy Chief, Peace and Security, UN Women, and Tatyana Jiteneva, Policy Specialist, Peace and Security, UN Women
From social media platforms to the streets of major cities worldwide, women organising for equality and justice has increasingly been grabbing attention and headlines. In the field of peace and security, women’s participation has long been recognised as a critical factor for stability and recovery. It is key at a time the world is grappling with a multitude of crises that threaten decades of development, undermine people’s confidence in multilateralism and worsen risks associated with disasters.
Time and again, women’s peacemaking and peacebuilding efforts have proven to be sustainable and effective. The 2015 Global Study on Security Council Resolution 1325 (2000) compiled overwhelming evidence showing improved outcomes in all areas of peace and security when women are present.1 The newly released United Nations/World Bank Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict underscores the cost-effectiveness and resilience of women organising for peace, particularly in the context of State actors with low capacity and where resources for recovery and development are scarce.2
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Feeding the Global Compact on Migration: How do immigrants contribute to developing countries’ economies?
By Michelle Leighton, Chief, Labour Migration Branch, International Labour Organization (ILO), and Theo Sparreboom, Senior Economist, ILO
“Before going to Thailand, I already had sewing skills but I did not have the money to open a store. Instead, I had to work as an employee and earned a small income. When I got back to my hometown, I had some savings and was able to open a tailor shop.1”
– Female migrant worker from Viet Nam
Contrary to popular belief, migrants have a limited impact on labour market outcomes in low- and middle income countries.2 They are unlikely to take jobs from native-born workers. In some countries, including South Africa, immigration may even create jobs and raise the incomes of the native-born population.
One reason why migrants do not take away jobs is that they are often in jobs that do not appeal to native-born workers. These include so-called non-standard forms of employment such as temporary work, agency work, and dirty or dangerous work. This is not surprising since for many people migration is a necessity and not a choice. Poverty or lack of opportunity encourages people to look for prosperity abroad. While regular channels of migration exist, they are often bureaucratic and expensive. Migrants who use cheaper options may end up in situations of exploitation and abuse.
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Are women holding up Chinese and African skies?
By Hannah Wanjie Ryder, CEO, Development Reimagined, and China Representative, China Africa Advisory
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In 1968, Chairman Mao might have proclaimed that women hold up half the sky, but it remains a sad fact that the majority of top African and Chinese politicians are still men. This is also the case for CEOs of state-owned and other large Chinese and African businesses. No woman has been president of any African country since Ellen Johnson Sirleaf stepped down last year, and in a recent study by the World Economic Forum (WEF), China was ranked 77th out of 144 countries in terms of female political representation, and 86th for economic participation and opportunity. Only eight sub-Saharan African countries featured overall in the top 50 of the same index. When I attended the Forum on China Africa Cooperation (FOCAC) in 2015, which has been running since 2000 and tends to be a very government-led affair, only two women were prominent – the head of the African Union Commission at the time Nkosazana Dlamini-Zuma, and Kenya’s then Foreign Minister Amina Mohamed.
But I am now noticing an interesting new phenomenon: Women from all over the world seem to be aiming to shape China-Africa relations.
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Gender equality in West Africa? The key role of social norms
By Gaëlle Ferrant, OECD Development Centre, and Nadia Hamel, OECD Sahel and West Africa Club Secretariat
Despite some progress, gender equality remains unfinished business worldwide, including in West Africa and particularly in the Sahel1. Such West African countries as Burkina Faso, Cabo Verde, Gambia, Ghana, Guinea-Bissau, Mauritania, Senegal and Sierra Leone have closed the gender gap in primary school enrolment. However, youth (aged 15-24) illiteracy rate in Chad is still twice as high for women than for men. In Liberia, only one-third of girls were enrolled in secondary school in 2015. Women are increasingly represented in the Senegalese parliament, and the proportion of female MPs almost doubled in the last five years, from 23% in 2012 to 42% in 2017. Nevertheless, women’s equal political participation remains a major challenge throughout the region. Women in parliaments increased only marginally from 13% in 2007 to almost 16% in 2017, with wide disparities across countries ranging from 6% in Nigeria to 42% in Senegal.
Continue reading “Gender equality in West Africa? The key role of social norms”Who will end global poverty?
By Michael Sheldrick, Vice President of Global Policy and Government Affairs, Global Citizen 1
For the second year in a row, the Trump Administration has proposed slashing U.S. development assistance programs by almost a third. Even though strong support on both sides of the U.S. Congress may prevent many – but not all – of these cuts becoming law, it is clear that the best hope for this period may be maintaining current levels of support. As the largest donor country, U.S. leadership on foreign aid is incredibly impactful. For example, based on our experience at Global Citizen, business leaders and policy makers announced 390 collective commitments in response to campaigns we either led or supported between 2012 and 2017. These commitments totaled more than USD 35 billion with nearly half of that, USD 15 billion, coming from just 5 countries, including the United States. And of the total number of new commitments, the United States makes up a nearly a quarter. In fact, the United States has been one of the largest contributors to many of the causes we champion, be it polio eradication, water and sanitation, or food aid.
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How to Build Inclusive Digital Economies
By Atul Mehta, Director, IFC, Telecom, Media & Technology, Fintech, Venture Capital & Funds; Ceyla Pazarbasioglu, Senior Director, World Bank Group, Finance, Competitiveness and Innovation Global Practice; and Jose Luis Irigoyen, Senior Director, World Bank, Transport and Digital Development Global Practice
If we wish to create a future built on shared prosperity, digital technology will be critical.
Today, of the world’s 10 largest companies by market capitalisation, six are technology companies. And of those, only two were in the top 10 just five years ago — which gives you a sense of how quickly the global economy is being disrupted.
In fact, as technology innovation accelerates, it may be the best path to inclusive growth. Extending Internet access in developing countries to levels seen in developed countries could enhance productivity by as much as 25%, according to Deloitte. The resulting economic activity could generate USD 2.2 trillion in additional GDP and more than 140 million new jobs.
At the World Bank Group, we have been putting quite a lot of thought into understanding what it takes to create a successful and inclusive digital economy, in light of our mission to end extreme poverty and boost shared prosperity. Technology can be a force for good — by promoting economic inclusion, efficiency, and innovation. But it can also cause upheaval — by displacing jobs or imperiling the security of personal and government data, and even critical infrastructure. And it can widen the digital divide — increasing the gap between those who benefit from technology and those who are excluded and risk falling further behind. That’s why technology’s risks and opportunities must be carefully managed.
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Maximising the public-private investment multiplier
By Alain de Janvry and Elisabeth Sadoulet, Professors at the University of California at Berkeley and Senior Fellows at the FERDI
At the FERDI-IDDRI conference on “Development, Climate and Security” held in Paris on January 15, 2018, Barbara Buchner from the Climate Policy Initiative reported on the state of global climate finance flows for mitigation and adaptation. She made two points. First, finance is under-invested to combat climate change if the COP21 target in temperature increase is to be met. Second, private investment’s role in complementing public investment in climate finance is large, with an estimated 2/3 private for 1/3 public in current total contributions. This stresses the fundamental part private investment can play in meeting the COP21 objectives, particularly at a time when governments face multiple demands on public expenditures.
With public investment targeted to induce private investment, this raises the issue of public investment’s effect as a private investment multiplier. A useful way of thinking about the under-investment issue is consequently how to target public investment to maximise the public-private investment multiplier.
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