Financing Africa’s SDGs Through Strategic Innovation

Progress toward achieving the Sustainable Development Goals (SDGs) has had a mixed record across the globe. For African countries, steady progress was made until the end of the commodity price supercycle in 2016 then started to decline, a situation precipitated by the COVID-19 pandemic and the war in Ukraine. Since 2023, this trend has reversed. The rest of the world’s experience has been slightly different, with progress on the SDGs having been stalled since the financial crisis of 2008/2009.¹ In both cases, even in the best of times, progress toward financing Africa’s SDGs has been dismally inadequate. For example, to achieve the SDGs, as captured by the aggregate SDG index,² African countries, on average, must grow at a rate of 4% per year. The average annual growth rate in the SDG index achieved by African countries is less than 1%, even at their best. The performance of non-African countries is even worse, with the highest annual growth rate in the SDG index recorded close to 0.6%, much less than the 3% required to meet the SDGs.³

The question before us, therefore, is whether the recent upward trend noticed in Africa could be sustained and accelerated to meet the SDGs by 2030?

Among the several factors required to accelerate progress toward the SDGs, availability of development finance or investment in the SDGs is the most critical. As Africa approaches 2030, the financing gap for achieving the SDGs is vast. According to estimates by UNECA,⁴ successful implementation of the SDGs would require $1.3 trillion annually, of which it is estimated African countries could mobilize a little over 50%, leaving a huge financing gap. According to the African Development Bank, this gap has been exacerbated by global economic downturns, the COVID-19 pandemic, and climate change-related catastrophes, creating significant pressure on national budgets and development efforts across the continent.⁵ These challenges of financing Africa’s SDGs coincide with rising public debt in most African countries, making reaching the SDGs by 2030 a daunting task.