Africa is a land that provides much opportunity for growth and development in poverty elimination, education and empowerment of the masses. The recent ratification of the Sustainable Development Goals (SDGs) brings much focus on investments required for African developmental targets. According to the African Infrastructure Country Diagnostic estimation, Africa is in need of at least $93 billion per year to achieve its developmental goals. So how is Africa to go about obtaining this level of funding?
Scientific Independence
Dr. Álvaro Sobrinho, who is a successful businessman and the chairman of the Planet Earth Institute NGO, is a prominent philanthropist and campaigner of Africa’s ‘scientific independence’. According to Dr. Sobrinho, Africa is endowed with many natural riches, but is dependent on others’ scientific knowledge and expertise for development. Dr. Sobrinho envisages total scientific independence for Africa, by implementing innovative scientific and technological advancements into government policies and institutions.
Scientific independence would mean that Africa produces its own scientists and technologists via sponsored higher education. According to Dr. Sobrinho, Africa today boasts of only 35 scientists and engineers per million citizens. This compares very badly with the figures in other developing countries, not to speak of those in developed countries. What Africa needs is not just an increase in these numbers, but better universities, equipped with greater resources and abilities.
Development Impact Bonds (DIBs)
DIBs provide instant, accountable and upfront funds for development programs, and help achieve Dr. Sobrinho’s scientific independence goals. Private investors are remunerated by good financial returns when programs achieve the necessary results. Investors are paid only for successful projects, which makes DIBs a great tool for fund accountability and project outcomes. For example, the Educate Girls DIB helps to increase school enrolment rates, helping economically-backward girls to achieve better futures.
Talented African students are sponsored by private investors to pursue science, technology, engineering or mathematics training. In return, African governments guarantee to remunerate these investors when the students obtain gainful employment. Investors can ensure that talented students succeed, thereby creating a skilled labour force much needed to address Africa’s developmental challenges today. DIBs play a great role especially when it comes to higher education initiatives, a priority development area. Higher education initiatives, according to the World Bank, provide an average 17 percent increase in earnings globally.
Involvement of Africa’s Private Sector
The African private sector has brought in a certain streamlined management culture and process efficiency to the country’s developmental projects. The private sector’s rigorous and outcome-oriented approach has induced other private and philanthropic investors to contribute confidently. This is in direct contrast to the time when there was no accountability for either funds received or project progress. The driving force of the private sector is one of the reasons behind the success of the DIBs for investment.
DIBs and Private Investors
Today, private investors have the opportunity to help build Africa’s scientific and technological infrastructure. The Center for Development says that DIB investors in the 2012 Greater Manchester and Thames Valley project recuperated their opening investments of £1.5 million in a span of three years. The Educate Girls DIB has also achieved 23 percent of the learning target, with enrolment rates at 44 percent in the first year. This means that the UBS Optimus Foundation that invested in this DIB has recouped about 40 percent of its initial outlay within just one year.
Where Africa is concerned, DIBs are not a silver bullet solution. However, DIBs allow private investors and philanthropists to create a real impact on Africa’s development. Apart from the just satisfaction of such a venture, there are impressive and timely financial returns as well.
Dr. Álvaro Sobrinho again: “Resource and finance for research, more effective international STI collaboration, production and retention of local scientists, diversification of African economies, public appreciation and knowledge of science, sustainable, long-term growth and development. They will all flow from this shift in mindset. It’s happening, in part, but it’s fragile and patchy and we need to support it.”
Read more on Dr. Álvaro Sobrinho’s blog here: alvaro-sobrinho.com
Dr. Álvaro Sobrinho here: twitter.com/Alvaro_Sobrinho