SPOTLIGHT: INFFs and COVID-19
SPOTLIGHT: INFFs and COVID-19

31 August 2020

Financing the SDGs: a new wave of financing strategies in developing countries can shape our tomorrow


The SDG Joint Fund approved financing for 62 developing countries to support the implementation of INFFs. Governments will join forces with civil society and other stakeholders to define financing strategies to achieve the SDGs and face the health and socio-economic emergency caused by the COVID-19 pandemic.


Author

Massimiliano Riva
Investment Advisor, United Nations Joint Sustainable Development Goals Fund


Building Block

Inception phase

Assessment and diagnostics

Financing strategy

Monitoring and review

Governance and coordination


Useful Links


Tags

#COVID19 #DFA #INFF #SDGs #FinancingStrategy #AddisAgenda

Since the coming of COVID-19 in January 2020, expressions of alarm have coexisted with optimism in a unique way among political leaders, experts and citizens. While the world has adapted to unpleasant social norms and suffered sudden economic and employment crises, renewed calls for solidarity and sustainability have surfaced. With a large share of the world’s production under full or partial lockdown for months, vast numbers of people are at risk of falling back into poverty: the World Bank estimates that 70–100 million people will enter into extreme poverty; inequality is similarly predicted to be on the rise. For these reasons, COVID-19 will have a major negative effect on the speed and likelihood of achieving the Sustainable Development Goals (SDGs) by 2030.

The COVID-19 response from governments has been remarkable, with frequent comparisons to the Marshall Plan and reference to mottoes like ‘the Great Reset. The crisis strongly reaffirmed the leading role of the state in the economy and on effective collaboration across the public and private sectors. Financial packages in excess of USD 9 trillion were already declared in May 2020. However, the call for solidarity has barely crossed geographical boundaries. Recovery plans remain largely national, while forecasts on official development assistance remain gloomy.

While a health emergency calls for immediate action, longer-term mileposts for SDG achievement should not be forgotten; the SDGs should be the compass of what is planned next. Despite, as a result, the world will undoubtedly experience difficult times ahead, SDG financing frameworks are part of the solution. The UN Joint SDG Fund stands to help countries keep their 2030 promise. By the end of March 2020,  the Fund had received 258 proposals to support SDG financing interventions in more than 100 countries in response to the Fund’s first Call for Funding on SDG Financing. The approved proposals will receive funding to create an enabling environment for SDG financing at the national level (Component 1) and to catalyse strategic investments that mobilize financing at scale (Component 2).

We are optimistic: In June 2020, the Fund approved funding for 62 UN Joint Programmes under Component 1, which represents a total funding of USD 80 million including co-funding from UN agencies and governments. A preliminary review of the portfolio suggests long-term contributions to the SDGs are in line with what the COVID-19 response demands (see the pillars 3, 4, 5, 6 and 8 of the UN framework for the immediate socio-economic response to COVID-19). The way recovery plans are shaped will define whether we can build a world that is fairer and more sustainable. As larger volumes of public and private resources are spent and blended, participatory mechanisms that measure SDG impact should be put in place. 

Figure 1: Geographical distribution of Joint Programmes, Source: UN Joint SDG Fund

Most of the 62 Joint Programmes will establish integrated national financing frameworks (INFFs); while others focus on more specific building blocks and strategies to channel new investments towards the SDGs. These Programmes include in their result-framework specific SDG targets with the below figure summarized the most referenced targets. Thematically, support to vulnerable groups (children, youth, women) and climate change features prominently.

Figure 2: SDGs linked to Joint Programmes, Source: UN Joint SDG Fund

The Joint Programmes will cater new generation of financing strategies for the SDGs. This call for proposals, is probably the largest single systemic initiative by the UN focused on cracking the challenge of adequately financing the SDGs, was made possible thanks to contributions from 12 development partners (Sweden, the European Union, Netherlands, Norway, Switzerland, Spain, Germany, Denmark, Ireland, Luxembourg, Portugal and Monaco). Funding under Component 1 will primarily reach Africa (41 per cent), followed by Asia-Pacific (21 per cent), Latin America and the Caribbean (19 per cent), Europe and Central Asia (16 per cent) and the Middle East (3 per cent); 40 per cent of the resources are invested in least developed countries; 10 joint programmes are implemented in small island developing states. These interventions reflect a first-time UN systemic response to accelerating achievement of the SDGs and will also deliver on the UN Secretary-General’s six-point agenda for mobilising resources in response to COVID-19. 

The Joint SDG Fund looks forward to supporting a coherent and cohesive UN system. Component 1 programming will support countries 'doing more and better with less' in the new post-COVID world. Component 2 programming will fast-track financing solutions for economic recovery that are inclusive and centred on vulnerable groups to make societies and economies more resilient and sustainable. 

For more information on the Joint Programmes, visit the Fund’s dedicated microsite