Honorable Mcebisi Jonas
Former Deputy Minister of Finance, South Africa, Founder, Nucleus | South Africa
Short Bio:
Honorable Mcebisi Jonas is the Founder and Director of Nucleus, a non-profit think tank based in Johannesburg, which conducts in-depth, nonpartisan research to improve policy and governance. He leads to drive democratic reform and activate the citizenry behind a new agenda for South Africa geared towards growth and prosperity. Mr. Jonas is the Group Chairperson of the South African multinational mobile telecommunications provider MTN. He was a former Deputy Minister of Finance in South Africa. He served as the Chairperson and Non-Executive Director of Public Investment Corporation Limited. Mr. Jonas served as a Member of the National Assembly in the Parliament of South Africa for the African National Congress. Mcebisi Jonas was previously appointed by the President of South Africa as part of his four special envoys on investment.
Event : SDGs Conference 2024 | Date: Sept 25, 2024 |
SPEECH
Allow me to start by quoting Lawrence Summers’ recent comments on the state of the developing world in April 2024. His remarks highlighted the challenges of debt, inflation, and climate change, pointing out that despite bold promises, 2023 was a disappointing year in terms of support for developing countries. Against this bleak backdrop, the 2024 Financing for Sustainable Development report estimates that the SDG financing and investment gaps range between 2.5 trillion and 4 trillion U.S. Dollars annually.
Without a responsive financial system and increased investment, the 2030 SDG targets will not be met. For example, Africa, with 18% of the world’s population, holds only 2% of global capital. Without capital, the SDGs will remain unmet. So, how do we bridge the gap? An “all hands-on deck” approach to prioritize SDG targets is the only logical response, calling for global cooperation across governments, the private sector, as well as multilateral institutions. Some experts point out that high interest rates and loan repayments resulted in nearly 200 billion U.S. Dollars flowing out of developing countries to private creditors in 2023, completely negating the increased financing from international financial institutions.
When we talk about raising finance, it is not just about mobilizing private sector funds for development but also adapting the system so that locally generated revenue is not immediately channeled out of countries to service debt, as is currently the case. The global financial and trade architecture must be transformed to reverse the tendency of poorer nations to continually serve the wealthier ones. The current model focuses on extraction and export, often with limited reinvestment in local infrastructure. We need to reverse this trend, prioritizing the strengthening of ecosystems within these countries.
To that end, there must be a greater effort to redirect global liquidity away from tax havens and towards infrastructure and reproductive investments in the developing world. There should also be a stronger focus on reforms that foster an enabling environment for private, institutional, and multilateral investments. Reforms at the national level are critical, but they also represent a global imperative. Collective political will from the global community is essential to achieve any solution. However, current geopolitical tensions pose a significant obstacle to meaningful cooperation. It is impossible to discuss global financing without acknowledging today’s geopolitical dynamics. Developing countries, particularly those in Africa, are bearing the brunt of these challenges as multilateral bodies are sidelined by ongoing conflicts in Palestine, Ukraine, and Sudan.
In closing, I want to highlight two key points. First, transforming the global financial and trade architecture to benefit poorer countries is essential. This transformation requires not only governmental action but also the active involvement of civil society. Second, to facilitate public-private partnerships, we need strong states. Many countries most in need of financing have weak states, which struggle to engage in partnerships with the private sector and multilateral institutions.
To conclude, I am reminded of Francis Fukuyama’s thoughts on neoliberalism. He argued that it is not just about celebrating the market but also about the denigration of the state. If we are to build meaningful partnerships with the private sector and multilateral institutions, the state must be strong.