Africa Advised to Build Inclusive Business for Sustainable Prosperity and Wealth Creation

02 Aug 2013

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 A new report by the United Nations Development Program (UNDP) indicates that the key to boosting economic growth and sustainable development is to involve low-income communities in business. The report “Realizing Africa’s WealthBuilding Inclusive Businesses for Shared Prosperity,” provides the status on inclusive business and its promise in Africa with insights from over 170 enterprises and partnership case studies from a wide range of sectors, including banking to agri-business, expert interviews and survey responses.

The report was produced under the leadership, coordination and funding of the UNDP African facility for Inclusive Markets (AFIM), which is a regional programme that is working to accelerate progress toward the Millennium Development Goals (MDGs) by supporting the development of inclusive, pro-poor markets across Africa. The launch in Kenya was co-hosted by The Business Call to Action (BCtA) - a global initiative challenging companies to develop innovative business models that offer the potential for both commercial success and significant development impact. Member companies working in Africa on varied inclusive business initiatives, include: Sproxil, Juhudi Kilimo, Novartis, Barefoot Power and Toughstuff International

While Africa has demonstrated strong economic growth over the past decade, this growth has not translated into poverty eradication or human development, due to lack of access to basic goods and services or opportunities for employment and regular income. The report, therefore, looks at the approaches and conditions required to bring economic growth closer to low-income communities in Africa, focusing on how businesses can more readily include low-income populations as consumers, entrepreneurs and employees. Inclusive businesses can engage low-income communities through, among other things, directly employing low-income people; targeting development of suppliers and service providers from low-income communities; or providing affordable goods and services targeted at low-income communities.

 “The Private sector is playing a crucial role in enabling Africa realize its development goal and seen the continent break the chains of economic stagnation towards a sustained growth path. At UNDP we will strengthen our efforts to foster inclusive business to improve the lives and livelihoods of the poor and vulnerable through commercially viable ventures.” remarked UNDP Country Director for Kenya, Maria-Threase Keating.

Sentiments shared by Jurgen Nagler, UNDP’s Program Specialist at the African Facility for Inclusive Market (AFIM)  who said “Africa’s wealth lies with its people and by enabling these individuals to engage in business, the private sector unleashes people potential.”

Also at event was the Chief Executive Officer of the Kenya Private Sector Alliance, Carole Kariuki who stated that the Private sector was up to the challenge to grow the country’s economy but said that there was a need to embrace technology to move forward. “We must improve the way we do business by using new, yet simple technology. Farmers are now able to get more crop yield, while transport has become more efficient therefore goods and services are reaching the consumers faster, meaning that everyone in the chain gets to benefit.

Kenya is ranked second after South Africa for embracing inclusive business in the continent with notable companies such as Safaricom with its M-Pesa mobile money transfer service which has a reach of 15 million people, while  Equity Bank and K-Rep Bank have successfully helped increase the income of thousands of small-scale farmers. Local entrepreneurs are creating significant positive change as well. David Kuria founded Ecotact as a social enterprise providing sanitation services. Ecotacts’s Ikotoilets now serves nearly 50,000 slum dwellers.

In order to advance the inclusive business approach, the report calls for the creation of broader support mechanisms at both national and regional levels, with the support of finance mechanisms which provide resources for coordination, information and funding.  This will ensure that all actors in Government, Private sector and Civil Society Organizations play their part to create inclusive business.

Other participants at the launch were, representatives from the Government, private companies including members of the Business Call to Action (BCtA), Civil Society Organisations, development partners including UK Department for International Development (DFID), US Agency for International Development (USAID), Sweden and Danish Embassy to Kenya who acknowledged the findings of the report as a best practice to explain the inclusive business approach.

For more information

 Please contact:

Karen Newman: Senior Communications Consultant (BCtA) karen.newman@undp.org

Mwendwa Kiogora: Communications Associate (UNDP K) Mwendwa.kiogora@undp.org ,0722725237

Download the report www.undp.org/africa/privatesector

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UNDP contributes to Kenya’s development by ensuring that growth is inclusive and sustainable,

incorporating productive capacities that create livelihoods for the poor and excluded, in particular women and youth. Through partnership with the Ministry of Devolution and Planning and other public and private players, UNDP has embarked on an integrated multi-year and multi-partner programme on inclusive growth and economic empowerment of women and youth. This project in partnership with KEPSA fosters inclusive business and public-private collaboration.

UNDP African Facility for Inclusive Markets (AFIM) is a regional private-sector and inclusive market development programme of UNDP’s Regional Bureau for Africa. Its objective is to accelerate progress towards achievement of the MDGs by supporting the development of inclusive, pro-poor markets across Africa.

Business Call to Action (BCtA) is a global initiative challenging companies to develop innovative business models that offer the potential for both commercial success and significant development impact. Since inception, more than 70 companies worldwide have responded to the BCtA by making commitments to improve the lives and livelihoods of millions of people through commercially viable business ventures that engage low-income people as consumers, producers, suppliers, and distributors of goods and services. The initiative is the result of a partnership between the Australian Agency for International Development (AusAID), the Dutch Ministry of Foreign Affairs, the Swedish International Development Cooperation Agency (Sida), UK Department for International Development (DFID), US Agency for International Development (USAID), United Nations Development Programme (UNDP), the United Nations Global Compact, the Clinton Global Initiative, and to meet the anti-poverty Millennium Development Goals by 2015.