The United Nation’s Sustainable Development Goals describe the work that needs to be done to build the world we hope to have in 2030. These goals include poverty reduction, zero hunger, health, education, gender equality, and clean water and sanitation, among other goals. International partnerships and cooperation have shown that all of these sustainability goals are possible and work continues at a brisk pace. How are the new population demographics impacting both sustainable development and a market-driven financial services industry?
Extreme poverty and population growth is expected to concentrate in equatorial Africa by 2050. The populations of Nigeria and the Democratic Republic of Congo are expected to more than double by 2050, while the population growth in the rest of the world slows. At this time, the median age in Africa is 18; in North America the median age is 35, and 47 in Japan.
The roots of the extreme poverty in these regions are amenable to the UN’s Sustainable Development Goals, though this work will be more challenging. The extreme poverty in this region comes from violence, political instability, gender inequality, and the effects of severe climate change. The geography of equatorial Africa makes transportation infrastructure more difficult; this directly impacts the ability of subsistence farmers to bring food to markets and impacts the ability of mobile financial services providers to penetrate these markets. Half of the subsistence farmers in Africa are women with children. In the coming decades, population pressures will continue to impact extreme poverty and make development opportunities more challenging.
The challenge of extreme population growth is also an opportunity. With healthy and educated young people living in stable societies, innovation will bloom and poverty will become a historical oddity. The work now is investing in the goals that will bring poverty, hunger, health and education in line.
One of the most important lessons from the work of the Bill and Melinda Gates Foundation, and reports in the 2018 Goalkeeper’s Report, is that developing strong and resilient partnerships across geographic regions is essential for successful outcomes with lasting impact. Solo efforts that are not invested in the social and political structures of the country are less likely to produce impactful and long-lasting results.
The data is also important to allow adjustments in efforts. For the 2017 data on financial inclusion, for instance, the percentage of people who have a bank account or access to financial services is improving, but not enough; at the current rate of inclusion the goals for 2030 will miss for both men and women. Based on the World Bank’s Findex, data shows that since 2014 the rates of people with either a bank account or mobile money account rose from 62% to 69%. The percentage gap between men and women remained the same, at 7%. This gender gap is significantly greater in some regions.
Financial services capacity building in these regions of extreme population growth coupled with extreme poverty will depend on the ability of domestic financial services industries and institutions managing regulatory control and infrastructure development, and the willingness to embrace emerging financial and communications technology. To some extent, this type of development in the financial services sector will also depend on stable political systems and strong regional economies, as well as emerging efforts to impact the escalating effects of climate change. It goes without saying that continuing regional and ethnic violence will bring these efforts to their knees, and negatively impact the ability of the young people in a region to work their way out of extreme poverty.
The UN’s Sustainable Development Goals and their progress are key indicators for the needs of the world by 2030- barely a decade away. All of the work at the country-level that has had significant impact has been market-driven with strong governance models, such as the efforts to reduce extreme poverty in India, Indonesia, and China. With these exemplars, and strong partnerships across regions and multiple stakeholders, the next generation in Africa can grow up strong, healthy, educated, and ready to innovate.
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