‘PARTNERSHIP IN THE POST-2015 DEVELOPMENT AGENDA’
delivered by Tony O. Elumelu, C.O.N.
before
ECOSOC and the General Assembly of the United Nations
New York
April 9, 2014
To: Secretary-General Ban Ki Moon;
Ambassador Ashe, President of the UN General Assembly;
Hon. Sajdik, President of ECOSOC;
Ambassadors, representatives, delegates and observers of the various nations and peoples of the world;
Representatives of civil society organizations and the private sector; Distinguished ladies and gentlemen;
I thank you for the opportunity to address this distinguished body that is both the symbol and embodiment of our common humanity; a body that everyday grapples with the challenge of balancing our choices and aspirations with our collective responsibilities to one another.
Coming from Africa, the continent most in need of development, I am particularly grateful to be able to speak on the collective targets that will have a life-changing impact for hundreds of millions of my people. As an entrepreneur- one born, raised, educated, and worked all his life in Africa, and now engaged substantially in nurturing more entrepreneurs in Africa, I would like to make a case for the prioritization of three important issues that affect our continent, in the implementation of the post-2015 development agenda.
They are:
1). Tackling unemployment and stimulating job creation;
2). Increasing access to electricity; and
3). Engaging the private sector as key stakeholders in achieving the 2030 development goals.
Reflecting on the Millennium Development Goals
In 2000, the United Nations made the historic announcement of eight Millennium Development Goals (MDGs). They were very specific, and had a timeline of 15 years for delivery. Most importantly, they were universal goals, even if the issues they sought to address were unique to certain regions of the world. The ultimate value of the MDGs was that they mandated a global response to the most pressing humanitarian issues affecting a significant number of the world’s population.
The MDGs were an acknowledgement that we are in fact our neighbour’s keepers.
Since then, we’ve made significant progress on these issues, as you all know well.
But there are still important lessons to learn from the formulation and implementation of the MDGs.
1. First, the formulation process was not very inclusive;
2. The goals were mainly focused on the most basic needs of the individual, and less on macro-economic development; and
3. They were implicitly designed to be government-and donor-driven, and lacked an explicit commitment to engage private-sector actors as financiers, stakeholders and implementers of the MDGs, to drive sustainability.
This is not to say that the private sector was totally absent from the implementation of the MDGs.
There are several examples of immensely successful public-private sector collaboration relating to the MDGs. Where these partnerships were the most effective was when the partnership involved businesses contributing through their own business operations – doing what they do best, rather than afterwards through CSR programmes funded by profits already earned.
I’m talking about examples like the creation of the Global Alliance for Vaccines and Immunization (GAVI) which issues “Vaccine Bonds” to investors all over the world, to fund immunisation in developing countries.
I’m talking about companies like Vodafone working with GAVI in Africa to record births and vaccinations, to remind parents to bring their children in for immunisation, and to manage vaccine stocks;
I’m talking about examples like the Global Fund leveraging Coca-Cola’s expansive global beverage distribution system and their core business expertise to build a more efficient medicines supply chain to take drugs to the “Last Mile,” thereby increasing the availability of critical medicines to 75 percent of Tanzanians and benefitting nearly 20 million people;
I’m also talking about the Extractives Industry Transparency Initiative, where governments and the private sector in resource-rich countries commit to transparency of payments to facilitate accountability in the natural resources sector.
And there are countless other such partnerships out there.
Now when it comes to the post-2015 development agenda, I’m pleased to observe that the process has been much more inclusive:
A High-Level Panel on the Post 2015 Development Agenda was appointed from both donor and recipient countries, and transparent and wide-ranging consultations have been held across the globe, at the government level, civil-society, private sector and grassroots level.
Most importantly, the High-Level Panel’s report emphasizes the importance of ‘Transforming Economies, and an Agenda for Jobs and Inclusive Growth’ demonstrates an understanding that both life and livelihoods should be addressed as we set sail for 2030.
And it is this reprioritization that excites me the most.
The Case for Prioritizing Economic Goals, particularly Jobs and Access to Electricity, in the post-2015 Development Agenda (The next MDGs)
No one here questions whether development is desirable. No one will challenge the essential human need to save as many lives as we can. But what we can question is whether we can achieve the development imperative with a disproportionate focus on humanitarian assistance and micro-economic issues. We should also question how much of our post-2015 development agenda we can achieve if we:
Maintain a heavy focus on governments as agents of development interventions;
Do not increase the level of engagement with the private sector in achieving our goals.
The Challenge of Unemployment and the Necessity of Prioritizing Job Creation and Inclusive Growth
I was delighted that the High-Level Panel raised the issue of jobs and inclusive growth as priorities for the next MDGS, because the countries with the largest percentage of poor, the sick, and the oppressed are also the countries with the smallest economies and smallest percentage of formally employed people.
We cannot continue to close our eyes to the looming crisis of unemployment on the African continent. With nearly 200 million people aged 15-24, Africa has the youngest and most rapidly growing population in the world. By 2045, our youth population will double, and exceed that of China and India. We must create 13 million jobs each year in sub-Saharan Africa just to keep pace with population growth. By 2020, Africa will need 122 million jobs if we are to succeed in the fight against poverty and maintain political stability and global security.
As an entrepreneur with diverse experiences in Africa, I see humanitarian aid and economic opportunity as two sides of the same development coin. The current development practice is to invest in the basic health and education of people, in the hopes that they will eventually make something of themselves.
However, I also think that if we help people make something of themselves, by investing in jobs and economic opportunity, and the multiplier effect of access to energy, the beneficiaries will purchase healthcare, they will purchase education for their children and look after their families.
They will live longer, live healthier and they will live in dignity. So we must not focus on one side of the coin at the expense of the other.
Citizens with the opportunity to be productive wage earners for their societies also become tax payers – and contribute to their own government coffers.
The Challenge of Lack of Access to Electricity
Lack of access to energy or electricity is another challenge that will prevent us from eradicating poverty. Nearly 589 million, or seven out of ten Africans, have no access to electricity;
Only 2% of South Sudanese and Burundians, and 3% of Liberians, have access to electricity.
Millions of mothers are giving birth in the dark, at great risk to themselves and their babies; millions more are walking further and further every day to gather dwindling resources of firewood;
Lifesaving vaccine deliveries are challenged by lack of power to support their cold chains;
Nearly two million deaths per year are associated from illnesses derived from cooking with wood and charcoal;
In African Business Enterprise surveys, fifty percent of businesses cited lack of electricity as the major constraint to their growth;
Education is another catalytic sector in achieving development gains, yet 90 million children go to school without electricity. This translates to at least 90 million lost hours of study and homework every day;
Over time this lack of electricity and lack of education will create a cumulatively devastating problem for a continent with a large young population without the necessary education and skills to power the continent’s industries and emergence as a full player in a mostly integrated global economy.
If we agree that access to electricity and improved livelihoods are vital components for the success of the Post-2015 Development Agenda, then the private sector will have a key role to play in the implementation of the post-2015 development agenda.
A global agenda that intends to address the livelihood of people and attack extreme poverty is not set up for success, if it does not fully engage the sector of society that controls the most capital, employs the most people, and fosters the most innovation.
Concerns over the Private Sector’s Involvement in Development Financing
Distinguished ladies and gentlemen, understandably, there are concerns about the involvement of the private sector in the post-2015 Development Agenda.
Indeed, some appear legitimate.
The first concern is that private sector financing will displace government Overseas Development Assistance (ODA). Let me say that private sector financing is not intended and cannot displace ODA. Government investment in development helps to stimulate and incentivize private sector financing. And we’ve seen this work successfully in multilateral investments in the fights against the global AIDS pandemic and the Power Africa Initiative, which have attracted the private sector to invest billions in those areas.
But we must also recognize that both donor and recipient governments have limited capacity to invest further, and in the current global economic climate, many are making cuts to their aid and public spending.
Thus, in our public capital constrained environment, serious consideration must be given to leveraging private capital to meet development needs outside of the most urgent humanitarian situations.
Another concern is that private sector values and interests are different and cannot be aligned with values that drive the development imperative.
Sadly, not all private sector actors have operated ethically, and it is unreasonable to assume that the market can solve all problems.
The world witnessed with bitterness, the bursting of the US housing and banking bubbles, which set off a devastating seismic chain of devastating national economic meltdowns, in multiple countries.
And that is why the creation of the UN Global Compact to elevate human and labour rights, and establish anti-corruption and environmental sustainability in corporate practices, is an important milestone in the area of corporate accountability.
However, it would also be wrong to assume that all businesses are driven by the principle of pure profit, devoid of values.
Africapitalism as a guiding philosophy for private sector engagement in development
I am the Chairman of Heirs Holdings, a values-driven African investment company which operates in strategic sectors of industry all over Africa, including banking, power, oil & gas, agribusiness, real estate and hospitality and healthcare.
We are driven entirely by the values and philosophy of ‘AFRICAPITALISM’- a term I coined to define the new role of the private sector in the development of Africa, through long-term investments that create economic prosperity and social wealth.
Heirs Holdings may be best known for our $2.5 billion, 2,000 MW commitment to Power Africa, a commitment we have started delivering on through our Transcorp Ughelli power plant.
We made the investment with the intent of returning a profit, while also creating significant social impact.
Through this, we are helping to create thousands of direct and indirect jobs in the economy.
We also know that it means more electricity for homes, hospitals, and very importantly, more homework at night.
It also means a huge boost for small businesses and entrepreneurs- which further leads to increased economic growth and job creation.
Ours is one of many examples of companies around the world seeking a more inclusive approach to growth.
Conclusion
A successful UN post-2015 commitment to create jobs and increase access to electricity will require governments, donors and multilaterals to:
Invest in human capital, through formal education and vocational skills training to drive employability;
Enact reforms and new policies to create more competitive business environments. This will not only unleash the growth of small and medium-size enterprises, it will also attract and incentivize multi- billion dollar investors, to fill the infrastructure gap in under-developed regions.
But we in the private sector have important reforms to make as well. We must:
Evolve our business theories of success and Corporate Social Responsibility (CSR). No longer can CSR be considered just small corporate donations to good causes in their communities of operations.
Launch CSR 2.0 and apply the principles of Africapitalism, which means that the intent to “create and multiply value,” in the societies in which we source, supply and operate, must be built into our corporate governance, into our operations, into our project development and into our profit calculation, across the value chain.
No longer wait for governments or the courts to compel us to do the right thing. We can do the right thing, while simultaneously doing well for our shareholders.
Finally, in the pursuit of a sustainable Post-2015 Development Agenda, we must harness the best of:
The political will, resources, incentivizing and convening power of the governmental sector; and combine it with
The compassion, selflessness and dedication of the non-profit sector;
The innovation, expertise and, financial capital of the private sector; and
The drive, creativity and entrepreneurial spirit of the very people we seek to help.
This is how we will transform the world we live in and truly make poverty history.
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