Traditional development finance models are struggling to address the significant Sustainable Development Goals (SDG) financing gap in fragile markets, particularly in Africa. This gap is widened by factors like poverty, climate change, conflict, and geopolitical uncertainty, leaving the multi-trillion-dollar potential of these emerging economies largely untapped.
Access to finance plays a critical role in combating poverty and mitigating conflict. Yet, equitable access remains elusive precisely where it is most urgently needed. In Sub-Saharan Africa’s 26 fragile states, poverty rates are, on average, 20% higher than in countries with similar levels of economic development—a disparity many attribute to financial exclusion. Structural flaws in traditional financial systems, including high transaction costs and limited access to reliable information, continue to marginalise poorer populations and perpetuate cycles of poverty.
Just as the world shifted from the Millennium Development Goals (MDGs) to the SDGs, a new approach to development finance is needed. This new model must move beyond traditional, profit-centric frameworks that often exclude high-risk, high-need fragile economies. Instead, it must reframe risk to focus on social, environmental, and peace-building dividends.
Recently, I was privileged to moderate a high-level roundtable, hosted by the UN Global Compact Network Nigeria at the Fourth International Conference on Financing for Development (FFD4) in Seville, Spain. The event brought together leaders from government, finance, and philanthropy to explore these innovative pathways. The discussion, titled “Reframing Risk and Return: Innovative Finance for Resilience in Fragile Contexts”, aimed to build a new playbook for financing progress in these vulnerable regions.
Among others, the Executive Roundtable featured a line-up of visionary panellists, including Senator Hope Uzodimma CON; Executive Governor of Imo State, Patrick Akhidenor; Chief Risk Officer, First Bank of Nigeria Ltd., representing Olusegun Alebiosu MD/CEO FirstBank Group; Teresa Guardans, Co-Founder, Oryx Impact; Krisztina Tora, Managing Director, GSG Impact; Hassatou Diop N’Sele N’Sele, Vice President/CFO of the African Development Bank; and other impactful speakers from the Green Climate Fund, Small Foundation, and Sida. The platform opened opportunities for collaborative action for capital mobilisation to support our goal of rethinking finance to serve the most fragile and vulnerable communities.
Key takeaways and proposed solutions
The roundtable discussion generated several key takeaways that challenge the status quo and propose a new direction for development finance:
●The Current Financial System is Inadequate: The existing financial architecture, designed to minimize risk, is ill-equipped to handle the complex realities of modern fragility, which is increasingly the norm rather than the exception. A failure to evolve will only reinforce exclusion.
●Resilience is a Return, Not an Expense: The prevailing view that investments in resilience, such as climate adaptation or peacebuilding, are too risky or slow is outdated. These investments are strategic because they reduce volatility, build social cohesion, and create an environment for long-term prosperity, delivering measurable social and financial returns.
●Africa is the Solution, Not the Problem: The narrative of Africa as a charity case must be rejected. The continent is a “goldmine of innovation, talent, and leadership”. What is needed is not charity, but rather trust, access, and catalytic capital to implement locally-led ideas.
●Youth Must be Financiers of the Future: Africa has the world’s youngest population, but youth are often excluded from formal financial systems. Funding models must evolve to reduce barriers for youth-led solutions, moving beyond grants to include equity and ownership.
●Ecosystems are Everything: Resilience is built not by capital alone, but by a holistic ecosystem of local infrastructure, technical expertise, smart policy, and trust. Investments should focus on creating these enabling environments rather than on “silver-bullet” interventions.
This collaboration from the various stakeholders is critical; governments, the private sector, financial institutions, nonprofits, and the local communities must work together if a new model is to be successful and sustainable. The consensus from the discussion is that fragile markets are not failed markets but are systems with untapped capacity that are currently under-invested. I believe that the future of sustainable finance must be braver, fairer, and more inclusive, moving from conversation to tangible collaboration and implementation.
. Nwokolo, CEO/Executive Director, UN Global Compact Network Nigeria
