People’s Development Corporation for Africa

A mobilization initiative for private funds

Foundation of PDCAPrivate sector corporations seek investment opportunities based on risk-return considerations.

MDBs and the IMF have lots of expertise and can enter into partnerships with private corporations. MDBs and the IMF however cannot raise capital from private citizens the same way as other organizations can, and they cannot conduct business by themselves or in the same places as regular corporations can.

However the People’s Development Corporation for Africa can.

Ownership of PDCAThe People’s Development Corporation for Africa (or Asia, South America, etc.) (in short: PDCA) is a primarily privately owned and driven corporation, which is legally and organizationally structured like any other private corporation.

The owners however are private individuals and charitable nations, organizations and corporations which have invested a sum of money without expecting a return.

It’s a new way of mobilizing private funds and channelling it to development projects.

Funding of PDCAThere is a huge potential for funding within the private population - particularly in the developed world. Many people are eager to support development in third countries, but they need a way to help and at the same time, they want to see results from their investment.

Private citizens and others buy shares of PDCA at a fixed price per share, and the “invested” amount ends up in the investment portfolio of the PDCA. All raised investment capital must be used with the purpose of reaching the SDGs.

The PDCA can also fund activities and projects by obtaining loans from MDBs or by entering into partnerships with other corporations or organizations.

Activities of PDCA

The goal of PDCA is to work towards the SDGs.

Any financial solution working towards that goal can be used:

- PDCA can form subsidiaries to accomplish its goals (the SDGs) eg. start a mosquito-net-factory in a malaria-infected area thereby providing a much needed service at a reasonable price and improving livelihoods for workers and their families.

- Support specific projects as a silent partner.- Provide low-interest loans through a subsidiary development

bank to potential small and medium-sized corporations that will benefit the struggle for reaching the SDGs.

Activities of PDCA continued- Enter into partnerships as the private partner with MDBs.- Use the above methods to enter a new market where other corporations

refuse to be first-movers due to risks and an uncertain profit-margin.- When a subsidiary has obtained financial success in a new market, the

subsidiary can be sold off to another company to continue the services for the market, thereby freeing funding to be used for other projects.

Shareholder motivation and benefitsThe primary motivation of shareholders, donors and “investors” is philanthropic.

However there are some perks from investing:

- A regular newsletter will inform shareholders of the good the corporation is doing in Africa (or Asia etc. according to the specific region)

- Participatory influence on selection of projects. Parts of the investment funds (maybe 25 %) will be allocated according to voting by shareholders. They will have a choice between maybe 10 projects where the 3 with most votes will be implemented.

- Option to transfer (sell) shares to others for a nominal fee- Option to vote for board members

Specific strengths of PDCASince the PDCA doesn’t have investors demanding dividend, the PDCA can enter markets or support projects that will not be commercially sustainable, at least in the near term.

It has been seen time and again, that corporations hesitate when it comes to being a first-mover in an entirely new market, since the market may have a lack of qualified labor and higher risks than in other known markets.

PDCA can however take that risk and has a lower profit margin (none) to claim a success. Thereby supplying a market with a service or product, which may be desperately needed and promote education among the workforce.

Potential risks/challenges- Due to a lack of potential payouts, the funding scope will be limited. The

potential funding pool is however extensive and I believe it will be possible to raise a substantial amount for investments.

- The corporation will require plenty of expertise on starting new businesses, but will in some instances, if subsidiaries are not sold off, also require lots of knowledge regarding sustaining and growing established corporations.

- Activities of the corporation and its subsidiaries may not undermine the formation of sustainable markets but should support it.

FutureBy mobilizing private funds, along with multiple other innovations and mobilization and MDB and IMF activities, the SDGs are attainable.