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Africa in focus

The SDGs, business, and the development challenge

The most intriguing characterization of the new Sustainable Developments Goals (SDGs), endorsed by world leaders at the United Nations General Assembly on September 25, came from Amina Mohammed, assistant secretary-general of the United Nations and special advisor on Post-2015 Development Planning. During a panel discussion at the African Leadership Forum on September 24, Ms. Mohammed described the SDGs in a novel way, as “17 opportunities for investment.”  

Ms. Mohammed’s comment is a recognition that the private sector will play an important role in achieving the 17 SDGs, especially those related to food security, climate change, education, health, sanitation and water, gender equality, and reliable sources of energy.

The SDGs bring in a new player: the private sector

Why is the role of business in the SDGs important?

For the first time, the private sector has a recognized role in achieving the global development agenda. Indeed, in the Millennium Development Goals (MDGs), published in 2000, there was only a passing reference to the private sector, and that was to call on technology companies to enhance cell phone availability and internet penetration.

The new global development agenda is significantly different: Within the SDGs, there is an appreciation of the private sector’s role in the complex process of social and economic development. For example, Goal 8 (“decent work and economic growth”) emphasizes job creation, entrepreneurship, innovation, and small-and medium-sized enterprises. Goal 9 focuses on building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation—all tasks in which business and entrepreneurs are essential. Goal 17 (“partnerships for the goals”) encourages and promotes “effective public, public-private and civil society partnerships,” which are critical to commercial success and economic development in emerging markets, especially in sub-Saharan Africa.

Importantly, given that the cost of implementing the SDGs is estimated to be $4.5 trillion per year, there is a need for new collaboration models and financing instruments. Corporates and investment funds will be critical to mobilizing the needed funds.

The intertwining of business and development in the SDGs

The SDGs, unlike the MDGs, reflect a common language that increasingly is understood by government, civil society, and business. While distrust may remain in certain quarters, trust clearly is improving. As Horst Köhler, the former International Monetary Fund chief and one of the architects of the SDGs, said, these goals are “our declaration of inter-dependence for the 21st century.”

In the MDGs, full and productive employment and decent work for all was merely a target of the first goal. In the SDGs this target has been elevated to a goal in itself (Goal 8), which is to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” Obviously “productive employment” and “decent work” cannot occur without a robust private sector and a conducive investment environment.

Similarly, investors are waking up to the opportunity in Africa, and civil society increasingly is acknowledging the role of business in accelerating economic development. For example, the  African Growth and Opportunity Act (AGOA) Civil Society Network issued a communiqué following the 2015 U.S.-Africa AGOA Forum in Gabon that called on member governments “to create the investment and business environment, including protection for intellectual property rights, that will attract foreign direct investment to the textile and apparel sector with a view of increasing production capacity and vertical integration.”

Notably, the Post-2015 Development Agenda actually overlooks some goals in which the private sector can play an important role in promoting economic development. For example, when we consider Goal 16 (“peace, justice, and strong institutions”), we should remember that businesses and entrepreneurs can assist in the development of post-conflict states and contribute to the peace-building process. This suggestion is not new: There have been instances where companies have entered conflict zones. For example, U.S. oil companies navigated the Angolan civil war in the 1970s and helped stabilize the fledgling government in Luanda in the face of intense uncertainty and pressure, especially from the U.S. government. More recently, Nespresso has been working with Technoserve in the Yei region of South Sudan. Over the last two years, Nespresso has worked with more than 300 small-holder farmers to purchase and export 12 metric tons of fully washed green coffee. Several hundred farmers have received agronomy training while the civil war has raged.

Including the private sector in the development agenda comes with an important requirement: corporate accountability. The SDGs try to capture this priority by encouraging companies “especially large and transnational companies” to adopt sustainable practices and integrate sustainability information into their reporting cycles and annual reports (Goal 12.6). Companies will continue to be challenged to synchronize the outcomes of their investments, social and otherwise, with global development goals.

Relatedly, drawing the private sector more directly into the social and economic development process reflects the needs for a clear alignment between a company’s commercial objectives and a country’s social and economic development targets. While this places an emphasis on the importance of national development strategies, global goals such as the SDGs help clarify vital global objectives and create a common approach for achieving those goals. As Jane Nelson, director of the CSR Initiative at the Harvard Kennedy School and Brookings nonresident senior fellow, commented during a September 24 forum on “Business and the SDGs-Building Blocks for Success at Scale,” the Sustainable Development Goals are best seen as a “lighthouse” for all stakeholders engaged in the development process, both as a guide to decision-making and a measurement of progress.

Thus, the global development agenda remains large, the progress of the last 15 years notwithstanding. Fulfilling that agenda cannot be achieved without bringing business more directly into the development process and the development policy dialogue with government and civil society. 

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