Seven ideas on how to finance the SDGs

1 | Get everyone on board

The financing needs for the SDGs are too vast to go through a “central pot”, whether domestic, or global, or a mixture. At Unctad we estimate that the additional finance required to fund only the infrastructure (physical and social) needs associated with the SDGs for developing countries alone will be at least $2.5tn per year. That is a lot of money until 2030. Given this, everybody has to do their part: governments, companies, foundations, individuals. Hafiz Mirza, chief, Investment Issues Research, Unctad, Geneva, Switzerland

2 | Focus on domestic resources

A report by Government Spending Watch showed that 77% of spending on the MDGs was from domestic public finance, and also that this domestic finance was more stable, more aligned with government priorities, and easier to manage than donor-funded spending. So, by and large, I’d say the same would be true for SDGs – better if governments can raise resources domestically. But global rules and systems need to make that possible, including on trade and taxation, for example. Nick Bryer, head of inequality policy and campaigns, Oxfam GB, Oxford, UK, @oxfamgb

3 | Recognise the importance of the private sector

The SDG funding gap can only be met by significantly increasing private sector participation. While the philanthropic/donor community and government have an important role to play in helping address this gap, they do not have anywhere near the required resources to succeed alone. Lorenzo Bernasconi Associate Director, The Rockefeller Foundation New York, US

4 | Make sure everyone is accountable

Donor support to leverage private investment – and private finance generally – needs to be compliant with development effectiveness principles, and there must be robust environmental and social safeguards. Private finance needs to be transparent to allow accountability and citizens’ participation. Political leaders need to show some real courage and integrity in standing up to those powerful interests and ensuring finance is used to help the poorest and most vulnerable. Nick Bryer

5 | Consider large scale public financing in the form of grants

The crucial point at financing the SDGs is that we need mostly grants and can’t deal with loans or any forms of private risk capital, because the monetary return is mostly very limited. So, we need much more public spending, which is also limited in relation of the global SDGs’ needs of trillions. Matthias Kroll, economist, World Future Council, Hamburg, Germany

6 | Find the appropriate source of finance for each goal

We need the private sector in many areas of infrastructure and to promote economic development. But we need to unpack it to look goal by goal and sector by sector. We shouldn’t assume that public and private finance are perfectly substitutable, so that if you don’t have enough of one, you can simply add in the other. Romilly Greenhill, team leader development finance, Overseas Development Institute (ODI), London, UK, @romilly_odi

7 | Remember that one size does not fit all

One argument that has been made is that SDGs recognise the heterogeneous needs of developing countries such that the solutions may have to be context-specific. It is quite likely that for a number of countries, especially those in conflict, there would be no substitute for ODA. The key question is whether private risk capital can be made to work for the others. My personal view is that there can be no pre-set proportion for that kind of capital, certainly not a one-size-fit-all strategy. It would depend on a specific country’s capacity to develop bankable projects and absorb and utilise private capital. Ralitza Dimova, lecturer in development economics, University of Manchester, Manchester, UK, @RalitzaDimova

Read the full Q&A here.

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