Remarks by Judith Karl at the Signing Ceremony and Launch of “Leaving No One Behind in the Digital Era”

  • June 17, 2019

  • Kampala, Uganda

Leaving No One Behind in the Digital Era” is a strategy about serving the underserved, about inclusion, about our decades of experience in the field, and about system change.

Judith Karl
Executive Secretary, UNCDF

Good morning.

I am delighted to join you today and to take part in the launch of this important partnership—a partnership that is going to enable UNCDF to continue to contribute to the building of an inclusive digital economy in Uganda and beyond.

Today’s signing is a powerful reflection of the work that UNCDF has done with its essential in-country partners to make the finance for development architecture work for Ugandans.

Our efforts in Uganda reflect our core vision—that by deploying innovative finance approaches that successfully crowd-in public and private finance, we can create the demonstration effects that develop and transform markets; shift the dynamics of financing towards the local level; and, ultimately catalyze the system change that helps ensure that we truly leave no one behind.

We have been fortunate to see this critically important work unfold in five key areas:

Area-based development for Northern Uganda, where we are focusing on local road rehabilitation, and revenue generating infrastructure.

Food security and nutrition, with an emphasis on inclusive agricultural value chain development through digital financial services and innovations.

Infrastructure and services, where we are using blended finance facilities to boost public and private investments in local infrastructure and service delivery for equitable growth in urban and rural areas.

Green economy, where we are investing in early stage clean energy businesses to expand access to clean energy solutions.

And, of course, frontier innovation & the digital economy, where we are leveraging inclusive digital innovation and technology to drive SDG achievement, as well as financial inclusion and empowerment for households, SMEs, and women, refugeesand youth.

Today is also a reflection of the unique role UNCDF plays within the UN system. We are the UN’s capital investment agency for the world’s 47 least-developed countries. UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.

UNCDF pursues innovative financing solutions in three ways.

First, financial inclusion, which expands the opportunities for individuals, households, and small and medium-sized enterprises to participate in the local economy, while also providing differentiated products for women and men so they can climb out of poverty and manage their financial lives.

Next, local development finance, which shows how fiscal decentralization, innovative municipal finance, and structured project finance can drive public and private funding that underpins local economic expansion, women’s economic empowerment, climate adaptation, and sustainable development.

Finally, a least developed countries investment platform that provides the vehicle to deploy a tailored set of financial instruments to a growing pipeline of impactful projects.

And today is a reflection of the impactful partnership we have cultivated with Sweden. Sweden has been a crucial partner in the effort to promote sustainable development to the Last Mile; where resources are scarcest and the development challenges are greatest.

That partnership includes our “Renewable Energy Challenge Fund” where we provide seed capital to de-risk investments in energy SMEs, including SMEs in Uganda. With Sweden’s support, 25 energy SMEs in Uganda now have the capital they need to bring solar power and clean cooking solutions to last-mile customers—many of whom did not have access to either solar power or clean cooking solutions before. And to date, more than 70,000 products have been sold, with more than 50 percent of sales made to women customers, and with 180,000 tonnes of CO2 off-set.

With today’s signing, we are deepening UNCDF’s partnership with both Sweden and Uganda, because today’s agreement means that UNCDF will help advance Sweden’s 2018-2023 development cooperation strategy with Uganda. And I am delighted that we will be playing that role.

But perhaps most importantly, today is a reflection of the stubborn challenges that we still face when it comes to the SDGs. The stubborn challenge is that the countries where the sustainable development needs are greatest continue to be the same countries where the flows of finance are the scarcest, namely least developed countries (LDCs). To meet the SDGs by the 2030 deadline, we need more capital and more champions to pave the way for others to follow.

We need to make those changes now, before the structure of the current international financial system further entrenches the inequalities that leave poor and vulnerable countries and communities at risk of being left behind.

And that is why we are proud to launch our digital strategy—“Leaving No One Behind in the Digital Era”—and to do so in Uganda. Because it is one of our tools to change the financing for development architecture to ensure that sustainable development reaches the last mile, and that it does so by 2030.

The goal of the new strategy is to empower millions of people in LDCs to use digital services on a daily basis that leverage innovation and technology while contributing to the Sustainable Development Goals, including 1 million Ugandans by 2024. Let me highlight four aspects of the strategy.

First, “Leaving No One Behind in the Digital Era” is a strategy about serving the underserved. As I just mentioned, the global financial architecture in general, and the financing for development architecture in particular, can easily overlook LDC populations—notably youth, women, refugees and SMEs. Our strategy will ensure that we are leveraging digital tools to level the playing field—so that we can transform the lives of the underserved by enabling them to better manage their resources, smooth income flows, build assets and overcome shocks. It will also support the economic empowerment of women who continue to disproportionately represent the informal labor force. And it will enable SMEs to deliver the transformative effects they can have in a community when they are able to access capital and scale.

Second, this is a strategy about inclusion. We have a tendency to believe that digital economies are inherently inclusive. But the reality is that this is not a given. Findex data has shown how progress in digital financial inclusion may lead to a widening of the gender gap in some contexts.

This strategy, however, will ensure that our digital solutions are truly inclusive because it will entail an ecosystem approach that will focus on the supply and demand side challenges to financial inclusion. This ecosystem approach will best ensure that the digital economies we create are truly inclusive, contribute to equitable growth and bring long-term benefits to the underserved.

Third, this is strategy about experience. This strategy has been built on the digital finance work that UNCDF has conducted for over a decade in Africa, Asia and the Pacific. This is a comprehensive strategy for the simple reason that it constitutes a logical integration of UNCDF’s interventions in digital finance over the years in different and difficult geographies.

Finally, this is a strategy about system change. As I mentioned at the opening of my remarks, the vision that guides our work is one where by deploying innovative finance approaches that successfully crowd-in public and private finance can create the demonstration effects that develop and transform markets; shift the dynamics of financing towards the local level; and, ultimately catalyze the system change that helps ensure that we truly leave no one behind. And our earlier work in Uganda proves the point.

In August 2016, with UNCDF support, MTN Uganda launched with the Central Bank of Africa (CBA), the first micro-saving and micro-lending service of its kind. The market responded very positively, with 83,000 customers within the first 48 hours, 650,000 after one month, and over 1,000,000 in three months. Farmers involved in the project with Kyagalanyi (cha-ga-LAN-yee; coffee value chain) are using the service as a tool for consumption smoothening, buying fertilizer, paying school fees and payments to laborers employed during the coffee seasons.

In its work on digitized payments in agricultural value chains and cash-based transfers in refugees settements, 224,000 new, rural customers were onboarded to mobile money in 2017.

Overall, from 2014 to 2018, UNCDF support assisted in growing the proportion of the Ugandan adult population actively using a digital finance account from 26% to 44%. This comprises a market increase of 5 million users. At the same time, Uganda saw exponential increases in the number of digital financial service providers and active agents.

When you can support the dramatic increase in digital account users and agents, as well as the crowding-in of providers, you are doing more than driving digital financial inclusion. You are demonstrating the very viability of a market, and that can unlock the public and private capital necessary to leave no one behind.

That is the opportunity we have with the Leaving No One Behind in the Digital Era strategy: to get digital finance and innovation working for those left behind. Today, we have what we need in place to go to scale in Uganda. And we count on your support for our efforts to help make that happen.

In closing, let me extend a special thanks to you, H.E Per Lingarde, and your team in Uganda for supporting UNCDF over the next 5 years in contributing to the digital transformation of Uganda.

To the Honorable Minister Frank Tumwebaze (toom-Weh-BA-zey), your presence here is testimony to your commitment to partnerships that can deliver Uganda’s digital transformation. UNCDF is looking forward to a closer relationship with your ministry and other ministries like Education, Health, and Agriculture to make this programme successful and impactful for the people of Uganda.

To the UN family in Uganda, led by Ms. Rosa Malango, UNCDF is strongly committed to sharing its expertise in strong partnership with UN sister agencies to achieve the SDGs.

To the private sector and development partners, UNCDF is committed to continuing its strong collaboration to further develop a digital economy in Uganda that leaves no one behind.

And lastly to the UNCDF team in Uganda, let’s continue to deliver on our promise to the people of Uganda.