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

Jul 30, 2013

A new report by the United Nations Development Programme (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 wealth – building 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 African facility for Inclusive Markets (AFIM) and the launch co-hosted by The Business Call to Action (BCtA). The 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.

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.” Said the UNDP country Director, Maria-Therese Keating
Sentiments shared by Jurgen Nagler, UNDP’s Program Specialis 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 said that the Private sector was upto the challenge to grow the country’s economy but said that they have to embrace technology to move forward. “We must improve the way we do business by embracing 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 all everyone in the chain gets to benefit.”

Kenya is ranked second after South Africa in 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. Business Call to Action member companies working in Africa on varied inclusive business initiatives, include: Novartis, Juhudi Kilimo, Microensure, ToughStuff International, Envirofit, Standard Chartered, Diageo, ASDA, Nuru Energy, Nokia, Coca-Cola, Co-Operative Group, Barefoot Power, Honey Care Africa, MUJI and d.Light.

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.

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 201

Contact Information

Karen Newman: Senior Communications Consultant (BCtA)
Mwendwa Kiogora: Communications Associate (UNDP) , 0722725237