In the spirit of a true Accelerator Lab, the second Pan African Community of Practice Series for Access and Benefit Sharing (ABS) brought together experts to come up with ideas to stimulate investments in Africa’s bio-economies.
It is estimated that Africa needs between US$500 billion and $1.2 trillion a year to meet its 2030 development targets. Obviously, they cannot not be met by public finance alone, private finance must play a role.
From the blue economy to the wildlife economy, Africa has abundant natural resources. These can have a transformative impact if managed correctly.
We need to make a strong case against 'business as usual', where natural resources are extracted often in raw forms with little local benefit, and move to higher value-added products which directly benefit communities and countries.
This process of improving the value of a commodity is call valorization, and several initiatives are underway.
The Gender Toolkit featuring the MIND Your Step! Gender Tool and the Valorization Workbook featuring the Time for ACTION! Valorization Tool have been prototyped for several countries to design value chains that contribute to their biological and genetic resources and traditional knowledge.
While doing so, there are several things to keep in mind:
Value addition should be holistic, it is only by developing sound strategies, that are clearly articulated across all economic sectors that domestic bio-economies can attract robust investments.
Countries need to consider meaningful ways to improve their Doing Business ranking as business-friendly partners. They need to be proactive and not solely rely on the legal frameworks to generate benefits, but also combine other meaningful incentives.
The valorization of biological and genetic resource usually generates benefits apart from money. However, often the initial development of the value chain a comprehensive suite of finance solutions is needed to engage the public and private sector and communities. The BIOFIN Workbook 2018 enables countries to identify the most suitable ones. Example could include:
Tax exemptions or abatements can encourage private companies willing to outsource part of their research and development in the countries providing the resources, to enter into joint ventures with local laboratories, to hire local workforce, train local professionals in new technologies, invest in production units on-site, or commercialize and supply the end product.
Research grants disbursed through national trust funds such as Seychelles Conservation and Climate Change Adaptation Trust Fund (SeyCATT) or the Madagascar Biodiversity Fund to encourage research in biotechnologies, blue bonds to add value to biological and genetic marine resources which in return will support the blue economy and the conservation of marine areas. Or by establishing ABS dedicated impact investments or challenge funds such as the Malawi Innovation Challenge Fund to stimulate bio-discovery partnerships.
Developing effective financing mechanisms to ensure that revenues generated through ABS contracts are transferred back to the providers of bio-resources, as is being tested in one pilot state in India under a joint initiative of BIOFIN and PAGE.
Other forms of financing, such as those based on blockchain technology such as cryptocurrencies, for example Cedar Coin or a Bio Coin, to promote biodiversity conservation. In the same spirit, we can prototype an ABS Coin and launch an initial coin offering to raise funds critical for the financing cycle of life-science and biotech start-ups to boost domestic research and development.
This is how the synergies established between BIOFIN and the UNDP-GEF Global ABS Project are striving for impact to shape meaningful valorization strategies in a number of countries including Rwanda, India and the Philippines.
In Rwanda, a national valorization strategy is being developed to guide the country’s efforts towards reaping the benefits of its bio-economy based on genetic resources and associated traditional knowledge. In support of this, ABS and BIOFIN country teams are combining the monetary and non-monetary benefits arising from biodiscovery deals with other biodiversity financing solutions to support a national valorization strategy.
With that in mind, we believe there is much more we can achieve if we adopt a two step approach by supporting countries to first, develop meaningful #NextGen valorization strategies that are integrated and cross-sectoral, and second, blend the benefits arising from the utilization of such resources, such as royalties and up-front payments, with additional biodiversity financial solutions to make investment less risky and stimulate financial flows.
We are still at the very beginning of the journey in Africa, and there are often more questions than answers. If you are a business representative, a development practitioner or a stakeholder, if you would like to join us to contribute to this dynamic and emerging area, get in touch with us at firstname.lastname@example.org and email@example.com
This blog series highlights the main take-aways from the 2nd edition of the Pan African Community of Practice Series, an annual gathering to discuss tools and innovations to add value to Africa’s biological and genetic resources, facilitated by the UNDP-GEF Global ABS Project and partners.