UN Capital Development Fund (UNCDF) Executive Secretary Judith Karl today called on the international community to expand the frontiers of how it mobilizes and utilizes financing for development.
Specifically, the UNCDF Executive Secretary issued a call to action in three areas:
“First, we are calling on actors [CP1] to localize a critical volume of public and private finance so that it reaches the local decision makers and communities most left out by aggregate growth figures. Second, and connected, we are calling for the formation of flexible capital vehicles for local investment. Such vehicles can serve as last-mile investors to de-risk the local investment climate and lay the groundwork for other investors and stakeholders – both public and private – to enter with confidence. Third, we are calling for accelerated investment in financial inclusion, including through digital pathways, in order to support poverty reduction and women’s economic empowerment, and expand employment through small and medium enterprises, especially for young people,” Karl emphasized.
The call to action was issued was issued at a side-event - ‘Expanding the Frontier: Mobilizing local and inclusive finance for development’ - which UNCDF co-organized with the Governments of Benin and Ethiopia in the margins of the Third International Conference on Financing for Development.
The side event, explored how ODA is a critical stage-setter to leverage additional funds and to support the mobilization of domestic savings and capital for local investment, so as to promote inclusive growth outside capital cities.
“Scaling up investment without commensurate ODA flows will require that LDCs rely more on domestic resource mobilization to fill in the resource gap. This is where a major opportunity comes into play,” said H.E. Mr. Jean-Francis Régis Zinsou, Ambassador, Permanent Representative of Benin to the United Nations and Chairperson for the LDC Group. “There is a need to focus on the synergies and complementarity between development assistance, domestic resource mobilization and capital flows to use and unleash the financial resources and all the potential that LDCs have.”
The side event, moderated by Ms. Nicola Harrington, Deputy Director of the OECD Development Centre also featured as panelists Ato Getahun Nana, Vice Governor, Financial Stability Cluster, National Bank of Ethiopia; Mr. Denis Bandisa, Director of Governance and Service Delivery, Prime Minister’s Office, Ministry of Regional Administration and Local Governments, Government of Tanzania; Mr. Walt M. Macnee, Vice Chairman, MasterCard Worldwide; Mr. Mercus Chigoga, Head of Personal Banking, NBS Bank, Malawi; Mr. Patrick Walsh, Director, Global Partners Department, European Investment Bank; Ms. Anna Ryott, Managing Director and CEO, Swedfund; and Ms. Judith Karl, Executive Secretary, UNCDF.
“The emerging post-2015 development agenda goes beyond the MDGs in scope and ambition. It has a very strong focus on inclusive and sustainable development,” Karl noted. “The financial requirements for LDCs to achieve the post-2105 development agenda and the goals of the Istanbul Programme of Action remain enormous. ODA can be the largest source of external finance in some of the poorest and most vulnerable countries in the world. How then can we use ODA in new and smart ways to leverage public and private resources, especially at the domestic level, to support inclusive and sustainable growth? Through the measures identified in the call to action we can contribute significantly to achieving the post-2015 development agenda in an inclusive way” she added.
UNCDF’s extensive work in financial inclusion and in expanding local development finance and local fiscal space reflects some of the agency’s most obvious contributions to prove acceleration potential for inclusive and resilient local economic development.
The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 48 Least Developed Countries (LDCs). UNCDF uses its capital mandate to help LDCs pursue inclusive growth. UNCDF uses ‘smart’ Official Development Assistance (ODA) to unlock and leverage public and private domestic resources; it promotes financial inclusion, including through digital finance, as a key enabler of poverty reduction and inclusive growth; and it demonstrates how localizing finance outside the capital cities can accelerate growth in local economies, promote sustainable and climate resilient infrastructure development, and empower local communities. Using capital grants, loans, and credit enhancements, UNCDF tests financial models in inclusive finance and local development finance; ‘de-risks’ the local investment space; and proves concept, paving the way for larger and more risk-averse investors to come in and scale up.