Direction Wakanda: finance methods to make Africa a superhero continent

Africa 19

Amboseli national park, Kenya. (Sergey Pesterev, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Collins Kimaro, Co-founder, Obuntu Hub.


In January 2018, the Black Panther film lit a spark of what a transformed Africa could resemble. Wakanda: a fictional African country that is the most technologically developed in the world. Wakanda was more than flying cars – it was a canvas of economic and social prosperity for all African people. A painting of what the new era of technologically driven and socio-economically responsible progress, termed Globalization 4.0 by the World Economic Forum, could look like. An Africa that would tick all the Sustainable Development Goals (SDGs), estimated to cost at least $600 billion a year. Achieving this needs more than one Black Panther; it needs innovative and inclusive financing mechanisms; a government-backed investment fund and social impact bonds to generate more resources as well as employing blockchain technology to provide transparency.

The fabric of Africa’s transformation will be sewn by generating decent jobs for all. Africa must create more than 130 million jobs to reach full employment by 2020, roughly double the number it was able to create between 2000 and 2008. Time is running out, as 66% of young Africans are either unemployed or in vulnerable employment, yet the continent’s youth population is exploding. The majority of jobs in the world are created by small and medium enterprises. Africa is not short of innovative SMEs, with the drum of entrepreneurship beating from Tunisia to South Africa and from Cape Verde to Mauritius. Challenges arise, however, in gaining access to finance to scale.

To empower innovative SMEs to grow, a government-backed investment fund could be established. An investment fund, similar to venture capital, can be summarized as money invested to grow a high-potential business, often in exchange for equity shares and over a long period of time. This fund would not only invest in technology firms but in a wide range of SMEs with potential for growth, including startups that have validated their business models. In particular SMEs that are transforming economies (e.g. those building local, value-addition industries or providing solutions to development issues such as financial inclusion or affordable healthcare). There are countless examples of such SMEs, including FaLGates, which farms and mills Nigerian rice, or Jamii Africa’s micro-health insurance for the informal sector. Supporting these companies would not only create jobs but efficiently provide vital services through sustainable business models. Such investments would be made across various sectors to diversify risk and over a medium- to long-term period, giving the companies time to grow and eventually buy out the fund, recycling the capital.

Image: UN.org

If Wakanda had a national anthem, the values depicted in the African Union’s Agenda 2063 would be its inspiration. One promise is to increase the involvement of private capital. This is paramount to cover the large funding gaps that public revenue sources such as taxes cannot fill. Social impact bonds (SIBs) could help cover the gap by aligning government, institutional or private investors and civil society service providers. These differ from normal bonds as they offer financial returns based on achieving social targets. The government would issue bonds subscribed to by investors for projects that generate pre-defined, measurable social-impact objectives. The service providers (e.g. NGOs) use the funds to implement the project, and repayment is only made if the social impact targets are met.

SIBs could be part of the fuel for the locomotive that transforms our public sector. The pay-for-results model can instill the private sector’s results orientation and accountability in public service delivery. The Center for Global Development highlights that SIBs can also direct scarce resources to interventions that can have the largest impact. Furthermore, SIBs leverage cost savings as the social impact achieved reduces the government spending that might be needed. One example would be SIBs to finance the provision and training of irrigation systems for small-scale farmers. This would in turn reduce the amount governments need to spend on food aid during periods of drought and would not require any public funds until if and when the project had been successfully implemented.

Africa’s progress hinges not only on the ability to collect more funds, because corruption, in different disguises, claims approximately one-quarter of Africa’s GDP every year. As with Wakanda’s systematic protection of the fictional metal vibranium, we must ensure that our resources are invested for the correct purposes, projects and people. I subscribe to the school of thought that the fight against corruption must be decentralized. I believe that blockchain technology could offer a weapon for corruption’s downfall. Blockchain can be simply defined as a decentralized record of information; imagine it as a public database with everyone having a separate yet identical copy. As information is stored in sequential blocks across many different computers, to change the information would require altering all related blocks, for different copies of the blockchain, making it difficult to corrupt.

My first attack against corruption would be to design a public blockchain that records the initial value of development project contracts, the bids received and the final amounts paid (with proof of payment). This database would be publicly available – for an informed public is the oxygen for accountability and democracy. Any discrepancies between the figures would then be investigated by the appropriate institutions who would not be able to alter the information either, preventing collusion. Reducing corruption would also make more effective use of financing methods such as public-private partnerships that are currently riddled with low accountability.

In the end of the Black Panther film, King T’Challa declares that: “Wakanda will no longer watch from the shadows. We cannot. We must not.” In the same spirit, Africa must be bold and lead innovative financing strategies. To do so, I believe we need an inclusive approach with collaboration between the private sector as well as civil society to mobilize resources and combine expertise. A government-backed investment fund and social impact bonds could sustainably provide funds to implement and scale innovative provision of vital goods and services; adopting blockchain technology for transparency and tracking. These three measures can stimulate Africa’s new era of innovation-driven, inclusive growth to Wakanda and beyond.

In January 2018, the Black Panther film lit a spark of what a transformed Africa could resemble. Wakanda: a fictional African country that is the most technologically developed in the world. Wakanda was more than flying cars – it was a canvas of economic and social prosperity for all African people. A painting of what the new era of technologically driven and socio-economically responsible progress, termed Globalization 4.0 by the World Economic Forum, could look like. An Africa that would tick all the Sustainable Development Goals (SDGs), estimated to cost at least $600 billion a year. Achieving this needs more than one Black Panther; it needs innovative and inclusive financing mechanisms; a government-backed investment fund and social impact bonds to generate more resources as well as employing blockchain technology to provide transparency.

The fabric of Africa’s transformation will be sewn by generating decent jobs for all. Africa must create more than 130 million jobs to reach full employment by 2020, roughly double the number it was able to create between 2000 and 2008. Time is running out, as 66% of young Africans are either unemployed or in vulnerable employment, yet the continent’s youth population is exploding. The majority of jobs in the world are created by small and medium enterprises. Africa is not short of innovative SMEs, with the drum of entrepreneurship beating from Tunisia to South Africa and from Cape Verde to Mauritius. Challenges arise, however, in gaining access to finance to scale.

To empower innovative SMEs to grow, a government-backed investment fund could be established. An investment fund, similar to venture capital, can be summarized as money invested to grow a high-potential business, often in exchange for equity shares and over a long period of time. This fund would not only invest in technology firms but in a wide range of SMEs with potential for growth, including startups that have validated their business models. In particular SMEs that are transforming economies (e.g. those building local, value-addition industries or providing solutions to development issues such as financial inclusion or affordable healthcare). There are countless examples of such SMEs, including FaLGates, which farms and mills Nigerian rice, or Jamii Africa’s micro-health insurance for the informal sector. Supporting these companies would not only create jobs but efficiently provide vital services through sustainable business models. Such investments would be made across various sectors to diversify risk and over a medium- to long-term period, giving the companies time to grow and eventually buy out the fund, recycling the capital.

Image: UN.org

If Wakanda had a national anthem, the values depicted in the African Union’s Agenda 2063 would be its inspiration. One promise is to increase the involvement of private capital. This is paramount to cover the large funding gaps that public revenue sources such as taxes cannot fill. Social impact bonds (SIBs) could help cover the gap by aligning government, institutional or private investors and civil society service providers. These differ from normal bonds as they offer financial returns based on achieving social targets. The government would issue bonds subscribed to by investors for projects that generate pre-defined, measurable social-impact objectives. The service providers (e.g. NGOs) use the funds to implement the project, and repayment is only made if the social impact targets are met.

SIBs could be part of the fuel for the locomotive that transforms our public sector. The pay-for-results model can instill the private sector’s results orientation and accountability in public service delivery. The Center for Global Development highlights that SIBs can also direct scarce resources to interventions that can have the largest impact. Furthermore, SIBs leverage cost savings as the social impact achieved reduces the government spending that might be needed. One example would be SIBs to finance the provision and training of irrigation systems for small-scale farmers. This would in turn reduce the amount governments need to spend on food aid during periods of drought and would not require any public funds until if and when the project had been successfully implemented.

Africa’s progress hinges not only on the ability to collect more funds, because corruption, in different disguises, claims approximately one-quarter of Africa’s GDP every year. As with Wakanda’s systematic protection of the fictional metal vibranium, we must ensure that our resources are invested for the correct purposes, projects and people. I subscribe to the school of thought that the fight against corruption must be decentralized. I believe that blockchain technology could offer a weapon for corruption’s downfall. Blockchain can be simply defined as a decentralized record of information; imagine it as a public database with everyone having a separate yet identical copy. As information is stored in sequential blocks across many different computers, to change the information would require altering all related blocks, for different copies of the blockchain, making it difficult to corrupt.

My first attack against corruption would be to design a public blockchain that records the initial value of development project contracts, the bids received and the final amounts paid (with proof of payment). This database would be publicly available – for an informed public is the oxygen for accountability and democracy. Any discrepancies between the figures would then be investigated by the appropriate institutions who would not be able to alter the information either, preventing collusion. Reducing corruption would also make more effective use of financing methods such as public-private partnerships that are currently riddled with low accountability.

In the end of the Black Panther film, King T’Challa declares that: “Wakanda will no longer watch from the shadows. We cannot. We must not.” In the same spirit, Africa must be bold and lead innovative financing strategies. To do so, I believe we need an inclusive approach with collaboration between the private sector as well as civil society to mobilize resources and combine expertise. A government-backed investment fund and social impact bonds could sustainably provide funds to implement and scale innovative provision of vital goods and services; adopting blockchain technology for transparency and tracking. These three measures can stimulate Africa’s new era of innovation-driven, inclusive growth to Wakanda and beyond.

In January 2018, the Black Panther film lit a spark of what a transformed Africa could resemble. Wakanda: a fictional African country that is the most technologically developed in the world. Wakanda was more than flying cars – it was a canvas of economic and social prosperity for all African people. A painting of what the new era of technologically driven and socio-economically responsible progress, termed Globalization 4.0 by the World Economic Forum, could look like. An Africa that would tick all the Sustainable Development Goals (SDGs), estimated to cost at least $600 billion a year. Achieving this needs more than one Black Panther; it needs innovative and inclusive financing mechanisms; a government-backed investment fund and social impact bonds to generate more resources as well as employing blockchain technology to provide transparency.

The fabric of Africa’s transformation will be sewn by generating decent jobs for all. Africa must create more than 130 million jobs to reach full employment by 2020, roughly double the number it was able to create between 2000 and 2008. Time is running out, as 66% of young Africans are either unemployed or in vulnerable employment, yet the continent’s youth population is exploding. The majority of jobs in the world are created by small and medium enterprises. Africa is not short of innovative SMEs, with the drum of entrepreneurship beating from Tunisia to South Africa and from Cape Verde to Mauritius. Challenges arise, however, in gaining access to finance to scale.

To empower innovative SMEs to grow, a government-backed investment fund could be established. An investment fund, similar to venture capital, can be summarized as money invested to grow a high-potential business, often in exchange for equity shares and over a long period of time. This fund would not only invest in technology firms but in a wide range of SMEs with potential for growth, including startups that have validated their business models. In particular SMEs that are transforming economies (e.g. those building local, value-addition industries or providing solutions to development issues such as financial inclusion or affordable healthcare). There are countless examples of such SMEs, including FaLGates, which farms and mills Nigerian rice, or Jamii Africa’s micro-health insurance for the informal sector. Supporting these companies would not only create jobs but efficiently provide vital services through sustainable business models. Such investments would be made across various sectors to diversify risk and over a medium- to long-term period, giving the companies time to grow and eventually buy out the fund, recycling the capital.

Image: UN.org

If Wakanda had a national anthem, the values depicted in the African Union’s Agenda 2063 would be its inspiration. One promise is to increase the involvement of private capital. This is paramount to cover the large funding gaps that public revenue sources such as taxes cannot fill. Social impact bonds (SIBs) could help cover the gap by aligning government, institutional or private investors and civil society service providers. These differ from normal bonds as they offer financial returns based on achieving social targets. The government would issue bonds subscribed to by investors for projects that generate pre-defined, measurable social-impact objectives. The service providers (e.g. NGOs) use the funds to implement the project, and repayment is only made if the social impact targets are met.

SIBs could be part of the fuel for the locomotive that transforms our public sector. The pay-for-results model can instill the private sector’s results orientation and accountability in public service delivery. The Center for Global Development highlights that SIBs can also direct scarce resources to interventions that can have the largest impact. Furthermore, SIBs leverage cost savings as the social impact achieved reduces the government spending that might be needed. One example would be SIBs to finance the provision and training of irrigation systems for small-scale farmers. This would in turn reduce the amount governments need to spend on food aid during periods of drought and would not require any public funds until if and when the project had been successfully implemented.

Africa’s progress hinges not only on the ability to collect more funds, because corruption, in different disguises, claims approximately one-quarter of Africa’s GDP every year. As with Wakanda’s systematic protection of the fictional metal vibranium, we must ensure that our resources are invested for the correct purposes, projects and people. I subscribe to the school of thought that the fight against corruption must be decentralized. I believe that blockchain technology could offer a weapon for corruption’s downfall. Blockchain can be simply defined as a decentralized record of information; imagine it as a public database with everyone having a separate yet identical copy. As information is stored in sequential blocks across many different computers, to change the information would require altering all related blocks, for different copies of the blockchain, making it difficult to corrupt.

My first attack against corruption would be to design a public blockchain that records the initial value of development project contracts, the bids received and the final amounts paid (with proof of payment). This database would be publicly available – for an informed public is the oxygen for accountability and democracy. Any discrepancies between the figures would then be investigated by the appropriate institutions who would not be able to alter the information either, preventing collusion. Reducing corruption would also make more effective use of financing methods such as public-private partnerships that are currently riddled with low accountability.

 

In the end of the Black Panther film, King T’Challa declares that: “Wakanda will no longer watch from the shadows. We cannot. We must not.” In the same spirit, Africa must be bold and lead innovative financing strategies. To do so, I believe we need an inclusive approach with collaboration between the private sector as well as civil society to mobilize resources and combine expertise. A government-backed investment fund and social impact bonds could sustainably provide funds to implement and scale innovative provision of vital goods and services; adopting blockchain technology for transparency and tracking. These three measures can stimulate Africa’s new era of innovation-driven, inclusive growth to Wakanda and beyond.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Evidence shows ‘brutal’ killing of Saudi journalist ‘planned and perpetrated’ by State officials: UN independent expert

We must learn and change after Haiti sexual abuse scandal -Oxfam chief

Medical training without borders: what’s still missing?

A few, or rather two, trade and economic alliances may rule our brave new world

Statement by Executive Vice-President Margrethe Vestager on State aid measures to address the economic impact of COVID-19

Project Manager – 2024

How civil society must adapt to survive its greatest challenges

Mergers: Commission opens in-depth investigation into proposed acquisition of DSME by HHIH

Carbon neutrality and funds for EU programmes are EP priorities for EU summit

Facts, not fear, will stop COVID-19 – so how should we talk about it?

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

More accessible products and services for disabled and elderly people

Fair and Simple Taxation: Commission proposes new package of measures to contribute to Europe’s recovery and growth

“The markets have moved on renewables, policy makers must keep up”, A Sting Exclusive by Erik Solheim, Head of UN Environment

These countries have the most powerful passports

IMF asks Europe to decide on bank resolutions and the Greek Gordian knot

Health: The neglected aspect of climate change

Syria: WHO appeals for funding to sustain critical health care for millions trapped by conflict

Why the ECB prepares to flood the markets with more and free of charge euro; everybody needs that now

This app uses augmented reality to rewrite ‘herstory’

Will the EU ever tackle the migration crisis despite the lack of political will?

Cybersecurity Act: build trust in digital technologies

Poverty and social exclusion skyrocket with austerity

Eurozone governed by an obscure body and gray procedures

Will the EU reconsider Frontex’s role in light of accusations about violations of migrants’ human rights?

Guterres says UN stands ready to support Brazil’s search and rescue effort in wake of tragic dam collapse

Is there a chance for the West to win the war on terror?

An entrepreneurial point-of view on tackling the migration crisis and the risks of abolishing Schengen

The European Sting @ the European Business Summit 2014 – Where European Business and Politics shape the future

How COVID-19 is throttling vital migration flows

Why businesses are nothing without strong human rights

Does research make sense any more? The dire need for new ways to measure success

In tech-driven 21st century, achieving global development goals requires closing digital gender divide

Wind farms now provide 14% of EU power – these countries are leading the way

European Commission determined to conclude EU-Mercosur trade deal this year despite French concerns

We’ve lost 60% of wildlife in less than 50 years

Mental health and suicide: when the alarm bells are faced with deaf ears

“As long as we work together through thick and thin, more benefits can be delivered to the people of Eurasia”, China’s Premier Li Keqiang highlights from ASEM in Brussels

How youth and technology can drive Africa’s COVID-19 response

Nearly $4 billion needed to protect 41 million children from conflict and disaster

The big five EU telecom operators in dire straights

How transparency can help the global economy to grow

What just happened? 5 themes from the COP24 climate talks in Poland

Myanmar military leaders must face genocide charges – UN report

Helping small businesses fight cybercrime benefits the global ecosystem

WHO coronavirus briefing: Isolation, testing and tracing comprise the “backbone” of response

Everything you need to know about the US government shutdown

These are the world’s least – and most – corrupt countries

Peru should help more young vulnerable people into work

ILO warns of widespread insecurity in the global labour market

Greece will probably stay in the Eurozone but at what cost?

Victims’ Rights: New Strategy to empower victims

This incredibly detailed map of Africa could help aid and development

In Mozambique, it’s ‘a matter of the heart’ says Guterres, lauding the cyclone-struck nation’s ‘undeniable moral authority’

Service and Sacrifice: For Ghana, UN peacekeeping is a ‘noble opportunity to serve humanity’

Britain’s May won the first round on the Brexit agreement with the EU

More attacks, ‘persisting security challenges’ threaten progress in West Africa, Sahel

Who is to pay for Trump’s trade war against China?

EU and African leaders to jointly tackle the migration crisis across the Mediterranean

Yemen parties underscore ‘strong desire’ for peace, UN Envoy reports

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s