What comes to mind when you think of South Sudan? Crisis, refugees, casualties, corruption, and starvation likely top the list. You also probably think hopeless. You rarely think investment potential. But South Sudan represents an opportunity to move from aid to trade, and with the help of creative philanthropists and frontier market investors, this could happen over the coming decade. What is being proven elsewhere in Africa is that we must move beyond traditional aid models and increasingly focus on direct private capital flows into locally sustainable solutions.
The world’s youngest state is a chance to reimagine aid as a catalyst for innovation and partnerships. A vast country of 644,000 sq.km. – roughly the size of Texas – with possibilities for solar energy, health innovation and agribusiness development. Where some see only problems, others recognize untapped human potential in a country with over 11 million and at least 30 million hectares of arable land, less than 5 percent of which is currently cultivated.
Don’t get me wrong, South Sudan unquestionably needs a hand up right now, and those providing aid are bringing help that is desperately needed. Sixty years of war has left a devastated infrastructure and traumatized population with some of the worst health indicators on Earth. But, this new African nation can easily become yet another ill-fated example of reliance on foreign aid. In 2014, foreign aid totaled US$1.8B out of a total GDP of US$13.0B, with the U.S. being top donor at US$645MM. It’s no secret that long-term aid creates devastating dependencies and economic distortions that hinder the natural social, economic and human development of a nation. South Sudan can avoid the well-worn dependency trap and chart a path towards growth and prosperity, but the trick is that the work must start now. When it seems most impossible.
In his compelling 2012 New York Times op-ed, Bishop Elias Taban, a recognized national leader in South Sudan, called upon his people to turn sword to plough and for the American people to walk alongside his countrymen and women to ensure the world’s newest nation survives infancy. Three years later, however, the nation continues to struggle through cycles of conflict while the West, trying to help, repeats the failed approaches of the past.
Instead of sizeable, cumbersome block grants only accessible to international NGOs with huge operational infrastructures, we should instead focus on scaling systems that are locally owned and driven. Venture philanthropy is conducive to such an approach; based on venture capital principles and placing value on social return alongside economic return. It is a growing and compelling way to promote development in environments where large-scale commercial investment is limited.
The U.S. Agency for International Development (USAID) developed a small but groundbreaking program called Development Innovation Ventures, which pioneers venture philanthropy through foreign aid. It is an investment in potential – not aid – and is simply a smarter, more accountable way to support growth. By investing in Solar Sister, USAID will bring solar lighting and mobile phone charging technologies to people across South Sudan, where 50 percent of the population uses firewood or grass as the primary source of lighting and 27 percent have no lighting at all. An example of applying market-based principles that catalyzes nimble, creative, and sustainable solutions, instead of grant making from afar. Venture philanthropy amps up accountability, requiring rigorous due diligence, clear objectives, mentoring, technical expertise and well-defined performance measurements. Rather than directing funds toward dire problems, this approach directs funds toward the most effective, revolutionary solutions.
In addition, along a narrow red-soil road in Yei, South Sudan, is the EPC Clinic: a sustainable primary care clinic addressing preventable diseases affecting the surrounding community. This clinic sees 600 cases a month and operates with a local staff, independently of donor funds. Deep within a teak forest on the outskirts of Yei is the Nehemiah Secondary School: a top-notch secondary program educating the future leaders of South Sudan and funded by a local trucking company, not an international NGO or foreign government. These are examples of the future of South Sudan and are manifestations of the vision cast by Bishop Taban in 2012; scalable local innovations in the most difficult circumstances.
There are numerous other local solutions, which may not be as well known, but are working and need our attention and support. Well-structured, direct investments offer these ideas the potential to flourish. We should seek them out and align our skill sets and capital to their vision.
Investing in local solutions is an investment in lasting peace. It is the role the U.S. must play if we wish to chart a path towards healthier, more sustainable long-term development. Some will say that any investment in such a fragile context is unwise. It’s certainly no easy task, but it’s an investment worth making. For South Sudan, it requires leaders with the willingness to put nation before personal ambition and redirection of public spending into development rather than security. For the U.S., it requires patience, the willingness to reimagine aid and getting past the notion that we know best. We must walk toward the future alongside South Sudan with humility and have the courage to deploy strategies that ignite local innovation, foster independence and promote self-reliance. It isn’t going to be fast and it’s hardly simple, but it’s certainly not hopeless.