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Dossier: Financing for development

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This latest ECDPM dossier brings together the Centre’s work on financing for development over the last few years.

In this dossier:


The permanent URL for this page is ecdpm.org/financing-development.


Highlights and latest content


17 July – Read our latest blog ‘FFD3 – A steady start to a rocky road ahead?’

If the degree of consensus achieved in the process for the Third Financing for Development Conference (FFD3) is anything to go by, the omens look good for the post-2015 agenda and the agreements that need to be achieved for a new set of UN Sustainable Development Goals. This was just the first hurdle to cross out of three international fora in 2015, but all things considered it went reasonably well. This bodes well for the UN General Assembly in September. But December’s COP21 Climate Summit in Paris is another matter, writes James Mackie in our latest Talking Points blog.

Mackie was in Addis Ababa this week with our Press Officer Emily Barker, to discuss with many of the 7,000 delegates the importance of implementing clear policies to use finance effectively for development. He spoke at a side event on ‘ODA and Fragile Environments: The shift of Development Finance and Assistance in the Post-2015 Agenda’ and was interviewed by several African media organisations, including the Addis Standard and Addis Fortune.

If any journalists are interested in commentary on the conference from James or any of our other experts who work on Financing for Development, please contact Rhys Williams at rw@ecdpm.org or call +32 495 56 17 89.


15 July – Alexander De Croo, Belgian Minister of Development Cooperation explains The risk of not taking risks in development cooperation’

ECDPM’s James Mackie interviews Alexander De Croo, Deputy Prime Minister of Belgium and Minister of Development Cooperation in the margins of the Finance for Development meeting in Addis Ababa on 14 July, 2015.

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14 July – What you need to know about Financing for Development and the Addis Ababa conference

ECDPM’s Rhys Williams and James Mackie highlight the key things you should know about Financing for Development and about the conference in Addis Ababa.

Read their blog – ‘5 key facts about Financing for Development

Read their article on OneWorld.nl – ‘What you need to know about the finance conference in Addis Ababa‘ (in Dutch)


10 July 2015 – ECDPM will be present at the 3rd International Conference on Financing for Development in Addis Ababa

Next week, over 7,000 people will descend on Addis Ababa, Ethiopia to discuss one of the most vital questions of the post-2015 development agenda – how can we finance the Sustainable Development Goals? ECDPM’s James Mackie and Emily Barker will be attending the conference to discuss the importance of implementing clear policies to use finance effectively.

See our media brief here. If any journalists are interested in setting up interviews during the conference please contact Emily Barker at eb@ecdpm.org or on +32474123473. Share your thoughts on Twitter @ECDPM with the hashtag #FFD3.


10 July 2015 – Watch our latest video (or listen to the podcast) on financing development: ‘How will the world finance development? The significance of the Addis conference’

Ahead of the 3rd International Conference on Financing for Development in Addis AbabaECDPM’s Sebastian Große-Puppendahl, Bruce Byiers, San Bilal and Hanne Knaepen discuss some of the most prominent issues in the financing development debate. Watch the video or listen to the podcast below.



(Please refresh the page if the podcast does not load, or listen to it here)


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Introduction


In a rapidly evolving world, the challenge of financing development takes on new dimensions

What are the different types, sources and volumes of finance that can address the multitude of development challenges across countries and regions at various stages of development? What are the implications of these different financing tools for policy makers? These are the challenges developing countries have been confronted with for decades – and will continue to be so for years to come.

Finance for development will be key for the post-2015 Sustainable Development Goals

The future of financing development, in frameworks like the United Nations post-2015 Sustainable Development Goals and the African Union Agenda 2063, increasingly build on a recognition that developing countries must own strategies to drive them forward and finance their own structural transformation.

Measures that aim to mobilise domestic resources for development must derive from a better understanding of the political, economic and other drivers and obstacles to mobilising and using these resources. This should be done at the national and regional level in developing countries, with enhanced financial sectors and markets that work towards this end.

The 3rd International Conference on Financing for Development in Addis Ababa (13-16 July) will be a key moment to shape and agree on priorities, tools and commitments on financing for sustainable development that are fit for the modern challenges.

Need for a new comprehensive approach towards finance for development

Experience over the last decade, and leading research, like the European Report on Development, call for a more comprehensive view of financing for development (FfD) that fully takes into account the crucial role and potential synergies between public and private finance, both domestically and internationally. It also highlights the importance of ‘enabling’ policy and institutional frameworks, as key determinant of the mobilisation of finance and its effectiveness on development.

Most African countries and institutions have made significant efforts to better identify and tap into various, sometimes new sources of financing, including from within Africa. These include improved tax policy and administration, greater access to stock markets, bonds and equities, sovereign wealth funds, remittances flows and tackling illicit financial flows.

Official development assistance (ODA) can still play a role in catalysing international funds that support these ‘enabling’ regulatory environments and raise the benefits of broader public and private investment. It’s clear that there is a need to use all sources of finance available, but at the same time reconsidering how ODA can be used most effectively to leverage these sources.

The role of international financial institutions, development finance institutions and other development banks can be instrumental. In this respect, the lessons learned used in new endeavors are most promising.


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African perspectives on financing development


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The state of the debate in Africa
Sahra El Fassi, ECDPM Talking Points blog, 17 April 2015


Against the backdrop of intensive global negotiations on the post-2015 sustainable development agenda, it seems an opportune moment to look at the state of the debate on financing for development (FfD) in Africa. A recent meeting, jointly organised by the African Union Commission (AUC) and the Economic Commission for Africa (UNECA) in Addis Ababa on 30-31 March, provided useful insights on how Africans are thinking about FfD.


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More on financing for African development from the Special Advisor on the post-2015 development agenda at UNECA
Aida Opoku-Mensah, ECDPM Talking Points blog, 17 April 2014


Aida Opoku-Mensah, Special Advisor on the Post-2015 Development Agenda at UNECA, argues that policy-makers need to address the African technology gap with home-grown solutions that support innovation – building strong human and institutional capacities at the same time.


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Implementing African Development Initiatives: Opportunities and Challenges to Securing Alternative Financing for the Agenda 2063
Faten Aggad-Clerx and Sahra El Fassi, ECDPM Briefing Note 65, June 2014


Africa has the potential to fund up to 70% of its own development agendas through several untapped resources. However, there are still many obstacles in the way. The Agenda 2063, a development initiative set up by the African Union Commission, aims to “use African resources for the benefit of all Africans.” The question remains – how can Africa turn potential financial sources into accessible and usable ones?


Photo-by-Embassy-of-Equatorial-Guinea-150x150 African funds for African development? The relevance of curtailing illicit financial flows
Sahra El Fassi, ECDPM Talking Points blog, 15 May 2014


The African Union Commission has turned the spotlight back on to Africa’s responsibility for its own development and efforts to curb illicit financial flows are firmly on the map. Reducing illicit financial flows from Africa are part of attempts to tap into the potential of Africa’s own significant resources. If these efforts are to gain real traction, continental and international partners need to be engaged in the process, with real incentives to tackle the challenges


African Perspectives Series
The new African Perspectives Series is a platform that casts light on development debates from the African perspective. If you would like to contribute to this series, please get in touch with our Communications Officer Rhys Williams.


Photo-by-StormSignal-150x150 African perspectives series – From policy to actual implementation
Oladele Arowolo, ECDPM Talking Points blog, 7 November 2014


Prof. Oladele Arowolo of the Human Sciences Research Council calls for Africa to develop and aggressively implement a local resource mobilisation strategy for its development. The African Union’s Agenda 2063 must identify two or three really strategic areas on which it can focus on implementation.


Photo-by-Ed-Yourdon-150x150 African perspectives series – The future belong to Africa if..
Julia Schünemann, ECDPM Talking Points blog, 30 October 2014


Julia Schünemann of the Institute of Security Studies (ISS) argues that the debate on Africa has shifted from entrenched Afro-pessimism to frantic Afro-optimism and more recently to an ‘Afro-realism’. Africa needs better and more integrated long term planning to take advantage of the opportunities that arise from sustained economic growth.


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European and global perspectives on financing development


European-Report-on-Development-2015-325x460 European Report on Development 2015 – Combining finance and policies to implement a transformative post-2015 development agenda
ODI, GDI/DIE, ECDPM, University of Athens and Southern Voice Network, May 2015


The European Report on Development (ERD) is an influential and independent report that aims to stimulate debate and research to enhance the European perspective on international development. The 2015 edition brings the post-2015 finance and goal setting processes together with an overview of development finance needs and supply, and the impact other means of implementation can have on the effectiveness of finance.


Financing-for-Development-Expert-Meeting-Netherlands-150x150 Netherlands expert meeting on Financing for Development
ECDPM, Kaleidos Research and Partos, Expert meeting, 28 May 2015, The Hague


ECDPM, Kaleidos Research and Partos jointly organised an expert meeting on financing for development (FfD) on the 28th of May 2015. The aim of the meeting was to stimulate and nurture the political and professional debate on the future of development financing.


Office-Blue-150x150 De-coding Public-Private Partnerships for Development
San Bilal, Sebastian Große-Puppendahl, Anna Rosengren, Florian Krätke, Gabila Nubong and Bruce Byiers, ECDPM Discussion Paper 161, April 2014


This paper aims to stimulate discussion on partnerships between public and private actors for achieving and financing sustainable development post-2015. It finds that the objectives, interpretations, practices and incentives of public and private partners are often diverse, leading to the question of who leads whom, and how? The paper was produced to feed into the UN Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF) Outreach Event on Co-creating New Partnerships for Financing Sustainable Development, in Helsinki, Finland, on 3-4 April 2014.


Photo-by-ILRI-Flickr-150x150 Post-2015: A paradigm shift?
James Mackie, Friends of Europe, 3 June 2015


The wider debate on a new post-2015 development agenda is in danger of missing two fundamental changes inherent in the Sustainable Development Goals (SDGs) – which if confirmed means a real paradigm shift in the way the global community thinks about international development. The first key change brought about by the SDGs will be a major shift from an agenda specific to a group of countries to one that is universal. The second shift is the way Europe thinks about its contribution to international development. Read James Mackie’s guest contribution to the Friends of Europe Development Policy Forum.


Money-Sky-150x150 Three priorities for a successful 2015 Financing for Development Conference
Sebastian Große-Puppendahl, ECDPM Talking Points blog, 12 December 2014


To serve its purpose, the FFD3 conference needs to put forward a strong political message that paves the way for successful negotiations of the SDGs. Participants will therefore need to demonstrate willingness and determination to agree on an ambitious Monterrey and Doha follow-up framework.


Photo-by-Michael-Renner-150x150 Universality and differentiation in the post-2015 development agenda
Anna Knoll, Sebastian Große-Puppendahl and James Mackie, ECDPM Discussion Paper 173, March 2015


The complexity and interconnectedness of today’s globalised world have rendered development challenges increasingly interlinked and global in nature. Prosperity cannot be sustained without finding integrated and common solutions and without all countries contributing in a spirit of solidarity and shared responsibility. The post-2015 agenda has framed sustainable development as a universal project. Translating the universal post-2015 goals and targets into national actions, commitments, responsibilities and accountability, that respect national priorities and circumstances, will be a major challenge.


Photo-by-United-Nations-150x150 Taking fragility seriously in financing the SDGs
Frauke de Weijer, ECDPM Talking Points blog, 6 May 2015


The recently published OECD report ‘States of Fragility 2015 – Meeting post-2015 ambitions’ presents very interesting facts and figures on the likelihood of fragile states meeting the post-2015 development goals. If we want to meet the post-2015 goals, in whatever form they take, we need to take fragility very seriously. This means drawing on the lessons learnt in the past, and making sure that the outcome of the Third Financing for Development Conference (FfD) in Addis Ababa this July is a step forward from where we are now.


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A universal global partnership – Wishful thinking? First thoughts on the new EU Commission Communication
Sebastian Große-Puppendahl, ECDPM Talking Points blog, 6 February 2015


The European Commission Communication ‘A Global Partnership for Poverty Eradication and Sustainable Development after 2015’ informs the EU’s position at the FFD3 conference. The Communication lists nine components as the means to implement the global partnership – with specific action for the EU.


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GREAT Insights magazine on financing development


GREAT-Insights-Financing-Development-150x212 Financing development
ECDPM GREAT Insights magazine, Volume 3, Issue 8, September 2014


This issue of GREAT Insights aims to address the unabating question of developing countries: How to finance development? In a rapidly evolving world, the challenge of finding answers to this question is taking new dimensions. The future of financing development, including in frameworks such as the post-2015 agenda and the African Agenda 2063, must build on a greater recognition of developing countries’ own strategies to drive and finance their own structural transformation.


GREAT-Insights-Financing-Infrastructure-150x150 Financing infrastructure
ECDPM GREAT Insights magazine, Volume 2, Issue 4, May-June 2013


Infrastructure is key for development. Yet, most developing countries face a chronic deficit of infrastructure facilities (in transport, energy, water, etc.). The articles in this issue of GREAT Insights attempts to draw on some of the current experiences and approaches to financing infrastructure development – an issue that will continue to dominate the development agenda for the coming years.


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Further reading


    Reports and papers

    Ensuring Public Debt Sustainability in Africa: Prospects and Policies
    Mthuli Ncube and Zuzana Brixiová, ECDPM Briefing Note 66, August 2014

    Blending loans and grants for development: An effective mix for the EU?
    San Bilal and Florian Krätke, ECDPM Briefing Note 55, October 2013

    Rethinking Aid for Trade in the context of innovative financing
    Dan Lui, Bruce Byiers and Jeske van Seters, ECDPM Discussion Paper 127, May 2012

    Reporting on Development: ODA and Financing for Development
    Jan Vanheukelom, Stefano Migliorisi, Alisa Herrero Cangas, Niels Keijzer and Eunike Spierings, study commissioned by The Netherlands Ministry of Foreign Affairs and the German Federal Ministry for Economic Cooperation and Development, April 2012

    Blogs, articles and presentations

    Innovative Financing in Africa
    Sebastian Große-Puppendahl, presentation made at the Post-2015 Charter Initiative Event, The Hague, 20 April 2015

    Blending or still just mixing?
    Sander Winckel, ECDPM Talking Points blog, March 2015.

    Financing Infrastructure Development: Quality over Quantity
    Sebastian Große-Puppendahl, ECDPM Talking Points blog, June 2014.

    European Development Finance Post-2015: Public Meets Private?
    Florian Krätke, Overseas Development Institute (ODI) Development Progress Blog,  21 May 2014

    Aid and beyond: Mobilising more resources for financing development
    Geert Laporte, Friends of Europe, 7 December 2012