Inclusive business finance field guide 2012: A handbook on mobilizing finance and investment for MSMEs in Africa
In the current global development context there is a growing focus on the mobilization of non-traditional resource flows such as remittances, carbon taxes and even domestic resources within donor recipient countries (i.e. domestic taxes) to support the funding of development programmes and projects. This trend is partly a reaction to the protracted global financial crisis which has impeded the ability of traditional donor nations in Europe and North America to rally support from their taxpayers to support and underwrite the previously made development contribution pledge commitments. However, it is also indicative of the growing interest of donor recipient nations to take greater ownership roles in their economic and social development programmes.
In addition to the above mentioned new sources of development funding, African donor recipients have also been increasingly pursuing south-south partnerships. Although from a decidedly modest base, much greater eﬀort is also being made by African governments and the development partners that they work with to engage with local and international businesses to work with them to get them to align their core business activities and corporate social investment activities with the development agendas in the countries where they are active. The intent is to identify areas of mutual benefit through programmes that leverage and support the aims of the corporations, the donors and the government.
Development partners working with African governments seek to engage with the multinational private sector active in Africa and to identify opportunities to also help develop the local private sector. Through these eﬀorts the collective aim is to catalyse job creation, technology transfer, and support the establishment of market opportunities for smaller domestic firms and low income commercial actors-through value chain access opportunities provided by the larger multinational companies who participate in the projects.
These emerging public-private partnerships and collaborations are also helping the micro, small and medium sized enterprises (MSME) who become part of larger value chains to mobilize financial and technical resources. Public and development partner support for value chain creation and expansion is helping to reduce the risk for both financiers and lead firms to work with new, often smaller, suppliers and distributors through the provision of risk-mitigating technical assistance and shared risk financial instruments.