Industry, Innovation and Infrastructure

With just five years left until the 2030 deadline, the global effort to achieve the Sustainable Development Goals (SDGs) has reached a critical juncture. Accelerating progress is essential, particularly for targets that are lagging behind. Among these, SDG 9, which focuses on industry, innovation, and infrastructure, plays a pivotal role in driving inclusive growth, fostering structural transformation, and supporting advances across the entire 2030 Agenda.

Blended finance is most relevant for investments with high sustainable development impact that are not attracting private investment but still have a solid business rationale and potential cash flows. While blended finance can be an option to support post COVID-19 recovery efforts, a new approach to blended finance is necessary to improve its impact. This approach should include: Developing country-led blended finance analysis, within an Integrated National Financing Framework (INFF), to guide development partners on where and how to use blended finance; Shifting focus to sustainable development impact, rather than bankability and leverage volumes; Enhancing transparency in reporting and monitoring, and providing capacity development; Using non-concessional resources (such as from development banks) when possible. This would allow official development assistance (ODA) to be used directly for support of social sectors that may be less suitable for blended finance transactions.

This policy brief reviews the socio-economic impacts of the COVID-19 crisis in Africa and presents the continent’s social protection responses. The crisis has hit the poorest and most vulnerable hardest and laid bare structural shortcomings such as inadequate health, educational and technological infrastructure, limited social protection, gender inequality, large informal economies, lack of access to basic services, constrained fiscal policy space and a high risk of debt distress in many countries, making them particularly vulnerable to the lasting effects of the pandemic. African countries have realized the need to scale-up social protection programmes and measures to meet the challenges brought about by the COVID-19 crisis as well as to ensure preparedness for other unexpected future events. Thus, they have introduced or adapted over 200 social protection and labour market policies in response to the pandemic. Recognizing the ongoing efforts as well as the persistent gaps and challenges, the brief stresses the need for allocating adequate resources for social protection systems and programmes, aiming for universal coverage to adequately address the different risks and vulnerabilities that individuals face throughout the lifecycle. It also urges development partners to provide financing support to the poorest countries to help them create fiscal space for increased public spending for social protection that is sustainable and equitable through multilateral development co-operation as well as national and regional multi-sectoral partnerships.

Over the last year, the data and statistical community has faced unprecedented disruptions in statistical operations and a spike in demand for data to monitor the effects of the global pandemic. Many National Statistical Offices adapted quickly to challenges raised by COVID-19, and many of them have played a major role in governments’ COVID-19 response. New partnerships have been crucial in responding to new data demands, helping National Statistical Offices introduce measures that are permanently changing the statistical production process in many countries. However, the pandemic has exacerbated critical funding gaps in national, regional, and global statistical offices, making the mobilization of international and domestic resources to support data for sustainable development more urgent than ever.

A lesson from the COVID-19 pandemic and the growing climate crisis is that development that is not risk-informed is neither inclusive nor sustainable. In light of this increasingly complex risk landscape, The 2021 Financing for Sustainable Development Report calls for a risk-informed approach to sustainable finance, and for investments in prevention, risk reduction and resilience. Because many such investments have a public good character, Governments must take the lead: incorporating risk analysis into their planning processes; overcoming ex post biases in their budgeting; aligning the private sector risk landscape with SDG risks, through carbon pricing and other incentives and regulations; and advancing risk-informed development cooperation in all its forms. Ultimately, all financing must be risk-informed and resilient, and sufficient financing must be available for investments in risk reduction and resilience, at national and global levels.