Leaders call for local capital mobilization to bridge Africa’s SDG financing gap

The United Nations estimates that achieving the Sustainable Development Goals (SDGs) by 2030 will require between $3 trillion and $5 trillion annually.

 In Africa alone, the financing gap stands at an additional $194 billion each year, roughly 7% of the continent’s GDP.

This shortfall has raised urgent questions about how emerging markets and developing economies (EMDEs) can accelerate sustainable finance and close the widening investment gap.

Against this backdrop, the Global Compact Network Kenya (GCNK), in partnership with the Principles for Responsible Investment (PRI), FSD Africa Investments (FSDAi), and the East Africa Private Equity & Venture Capital Association (EAVCA), convened a high-level roundtable to drive meaningful discussions on unlocking capital for sustainable development.

The convening took place on July 22, 2025, at the Villa Rosa Kempinski in Nairobi, Kenya, bringing together key stakeholders from the private sector, investment firms, multilateral agencies, and development institutions.

The roundtable focused on advancing sustainable finance through local capital mobilisation, strengthening the alignment of business and investment strategies with SDG priorities, and integrating sustainability-related factors into decision-making.

Participants also explored opportunities for scaling financial instruments like green bonds, blended finance, and impact investing tools that have shown promise in aligning returns with positive environmental and social outcomes.

During the discussions, it was noted that the urgency to scale up sustainable finance has never been greater, particularly in the face of intersecting challenges such as worsening climate impacts, biodiversity loss, economic volatility, growing inequality, and shrinking international aid flows.

Speaking at the event, the Executive Director of Global Compact Network Kenya (GCNK), Judy Njino, emphasized the crucial role that the private sector and the investment community must play in filling the SDG financing gap.

She underlined the potential for local capital to drive large-scale impact, especially when local businesses are prepared and aligned with the Sustainable Development Goals.

“Only 35 per cent of SDG targets are on track or show moderate progress. Nearly half are moving too slowly or making only marginal progress, while 18 per cent have regressed. The gap between our sustainable development aspirations and financing to meet them has continued to widen.’’

Her sentiments were echoed by David Atkin, Chief Executive Officer of the Principles for Responsible Investment (PRI), who reaffirmed PRI’s belief in a global financial system that supports long-term value creation and rewards responsible investment.

 He emphasized that sustainability is no longer a peripheral consideration but a fundamental component of how modern capital markets must operate.

Atkin noted that institutional investors have a key role in shaping a future where investments deliver lasting benefits for both society and the environment.

By prioritising accountability and sustainability, investors can contribute meaningfully to economic systems that support resilience and shared prosperity.

Critical takeaways from the roundtable included a shared understanding of the need to increase collaboration among businesses, investors, and development partners.

There was also a strong call for the development of practical, real-world financial solutions that address on-the-ground challenges in EMDEs.

The discussions highlighted the growing demand for financial instruments that can deliver competitive returns while directly contributing to SDG progress, particularly in sectors such as clean energy, climate-smart agriculture, healthcare, education, and affordable housing.

“With official development assistance declining and fiscal space constrained, the private sector & investor community have an opportunity to step up as an engine for inclusive & sustainable economic growth. We must ensure that businesses, especially local ones, are ready, aligned, and equipped to absorb this capital,” Njino said.

Participants further noted the importance of creating enabling environments.

This includes clear regulatory frameworks, investor protection mechanisms, and stronger ESG (Environmental, Social, and Governance) integration to support the scale-up of sustainable finance.

As the world edges closer to the 2030 SDG deadline, the Nairobi roundtable served as a timely reminder that mobilising capital for sustainable development is not just a technical challenge.

It is a collective imperative that requires leadership, innovation, and bold partnerships across all sectors.