Source: United Nations General Assembly and Security Council
Following are UN Deputy Secretary-General Amina Mohammed’s remarks at the high-level session of the International Business Forum, in Sevilla, Spain, today:
It is a privilege to join you today at this pivotal moment for the future of development finance.
Sadly, the world faces a sustainable development crisis. Trade barriers are growing. Aid budgets are shrinking. Macroeconomic risks are mounting. Debt burdens are dragging down growth. Climate shocks are hitting harder and more often. Development finance is at a critical inflection point.
Official development assistance (ODA), long a cornerstone of international solidarity, declined by 7 per cent in real terms last year. And further cuts are already on the table.
But, the real picture is even starker. Much of what is counted as ODA today is being redirected to cover domestic priorities, not long-term Sustainable Development Goals (SDG) investments. At the same time, the SDG financing gap has ballooned to $4 trillion a year.
Yet, amid this sobering reality lies an opportunity: An opportunity to reimagine development finance for the world we live in now. To move from a model built on assistance, to one driven by purpose and partnership. From international assistance, to strategic, sustainable investment.
In this new vision, public finance, national and international, remains essential. Especially in sectors where market incentives are weak, but human needs are immense, like education, health, social protection.
But public finance alone cannot carry the weight. It must be used to unlock and leverage private investment, at scale and with speed. The question we need to answer is clear: What will it take for private capital to flow where it is most needed?
The outcome document of the fourth International Conference on Financing for Development, the “Sevilla Commitment”, puts forward a compelling action agenda that seeks to answer this question.
First, we need an enabling business environment, supported by strong institutions, policy coherence and investment pipelines.
Second, we need better blended finance vehicles that deliver sustainable development impact and align with developing countries’ national priorities. This requires standardizing blended finance with replicable and scalable structures, a ready pipeline of bankable projects and more transparency in the development outcomes of transactions.
Third, we need financial innovation. Equity instruments. Auction mechanisms. Creative tools that allow public and private actors to share risk and reward more fairly.
Fourth, we must scale up aggregation platforms that expand catalytic capital and reduce transaction costs by pooling resources from international financial institutions.
Fifth, it is time to reassess prudential regulations that may unintentionally discourage long-term investments in developing countries. We need to engage with regulators to ensure risk is not mispriced and regulation enables greater use of risk-sharing tools.
Let’s be clear: we must dramatically expand our sources of development capital, and we must do so urgently and intentionally. This is why the United Nations calls on all actors across the investment ecosystem to join us in a long-term, collaborative effort to reshape development finance.
At the UN, we are taking concrete steps to strengthen partnerships to unlock capital for sustainable development. Platforms such as the Global Investors for Sustainable Development Alliance are bringing together private investors, foundations, policymakers and leaders across the development finance spectrum. These leaders can shape sustainable finance frameworks, identify investment barriers and pilot innovative solutions.
Working together, we can coordinate action, amplify impact and accelerate the global shift towards long-term, responsible development finance. Private sector partners bring more than capital. They bring creativity, agility and scale. They can power the transition to green energy, accelerate digital inclusion and revolutionize service delivery.
Philanthropic partners are also uniquely positioned to take risks others cannot, test innovations and address gaps that markets and Governments may not reach. They can back new models and ideas in early stage projects or help unlock larger flows of investment by building proof points and trust.
Above all, our financing systems must work for those who have historically been excluded, and on a practical level that means that means removing structural barriers that keep capital out of the hands of women-led businesses, youth innovators and underserved communities.
This is not about making tweaks here and there. It is about rethinking the fundamentals. The current financial system was not built for today’s world. Let alone tomorrow’s. We need a system that allocates capital not only by profit, but by purpose; not only by returns, but by impact.
The next chapter of development finance is not yet written. But, it must be a shared story written by all of us and accountable to all people. So, let’s seize this moment and step into this new era not as donors or beneficiaries, but as equal partners, and deliver on the promise of sustainable development. On behalf of the United Nations, I thank you for your leadership, your ideas and your resolve.
MIL OSI United Nations News –
