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Closing the Investment Gap: How Multilateral Development Banks Can Contribute to Digital Inclusion

April 23, 2018

Closing the Investment Gap: How Multilateral Development Banks Can Contribute to Digital Inclusion looks at the role of multilateral development banks (MDBs) in closing the digital divide and enabling universal internet access. The research specifically explores how — and how much — MDBs are investing in the ICT sector across low- and middle-income countries. Key findings include:

  • MDBs play a critical role in funding global development projects, committing an average of $100-$120 billion each year to development projects in low- and middle-income countries. Yet, despite increasing recognition of the importance of digital access to the realisation of the Sustainable Development Goals, MDBs are investing just 1% of their total commitments in ICT projects.
  • ICT sector investments by MDBs are low because ICT sector growth is generally seen as an industry driven by the private sector alone. This private sector-led model is showing its limits, as telecoms companies are increasingly less willing to take on the considerable capital requirements required to expand connectivity in the rural and poor areas that need it most.
  • Policy is a critical underpinning of ICT sector growth, yet just 4% of the limited MDB investment in ICT projects goes toward policy development. We must encourage increased investment in the development of these enabling policy frameworks.
  • The time for new, innovative financing models is now. We must work to create funding mechanisms that are more suitable for projects in rural and poor areas, and we must optimise the use of government incentives to attract private capital and improve the rural business case.
  • We must also change the investment narrative within and outside of MDBs to prioritise the ICT sector, impressing upon stakeholders the strong link between digital access and the SDGs and encouraging public investment in ICTs and digital access.

 

Download the full report.


This research was conducted in collaboration with the Alliance for Affordable Internet.

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