Sustainable financing and investment
Additional, targeted private and public capital is needed to achieve the Sustainable Development Goals.
Africa’s population is set to double to more than 2.5 billion by 2050. Every year, 15-20 million young Africans enter the labour market. Extensive public and private investment is required to ensure sufficient economic and employment growth for sustainable development.
The greatest obstacles to private investment are considered to be the absence or ineffectiveness of regulatory frameworks, a lack of projects and companies that are ready for financing, and inadequate access to financing instruments.
Successful public investments that fill infrastructure gaps, safeguard supplies, and pave the way for private investment require efficient management to guarantee their cost-effectiveness and ultimately generate development-oriented and sustainable results. This can be encouraged through effective investment management and access to capital markets.
GIZ’s approach to targeted investment promotion focuses on effecting change at critically important junctures within a country, thereby contributing to lasting economic and employment growth. In practice, this means that it does not seek to change everything at once, but instead concentrates on identifying and remedying major weaknesses and obstacles in order to improve structural dynamics and thus achieve long-term economic growth.
GIZ supports the establishment of investment partnerships that bring together key stakeholders – whether representatives of the government and local institutions, experts in business and finance, investors or civil society representatives. These partnerships make it possible to gradually create investment incentives, build public-sector capacities, mobilise public and private resources, and drive forward sustainable economic and social development.
- Create the framework conditions for investments: This includes removing obstacles to private investment – such as insufficient regulatory measures (concerning taxes, for example) – and building capacities in this field.
- Make projects and companies ready for financing: Support measures to improve information and databases, increase capacities and professionalism, network stakeholders, and enhance knowledge about the requirements of financiers.
- Improve access to appropriate financing instruments: Support providers of finance – for example, in financing instruments at an early stage – by increasing the capacities of local stakeholders, strengthening sustainability aspects, and providing advice on developments in the financial sector (such as crowdfunding).