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GREAT insights Magazine

Financing Development

Volume 3, Issue 8 (September 2014)

22-09-2014

ECDPM. 2014. Thematic focus: Financing development. 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.

We asked AfDB’s Chief Economist Prof. Ncube, EIB’s president Werner Hoyer, NEPAD’s Director of Corporate Services, as well as representatives from OECD, ODI, World Bank, AFRODAD and others to give their opinions and ideas on how to tackle the development finance question.


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Editorial
San Bilal – Head of Economic Transformation Programme, ECDPM
How to finance development? This is the challenge developing countries have been confronted with for decades, and will continue to be so for years to come. But in a rapidly evolving world, the challenge is taking new dimensions …

Features

Prospects and Policies for Ensuring Public Debt Sustainability in Africa
Prof. Mthuli Ncube, Chief Economist and Vice President, AfDB, and Zuzana Brixiová, Advisor, AfDB
Shortly after being hit by the global financial crisis in 2009, Africa staged a robust economic recovery and was one of the fastest growing regions in the world. The continent’s performance is projected to remain strong despite the fragile and tepid global recovery. As several studies and scholars have now pointed out, Africa has the potential to become a global growth pole over the longer term. However, vast infrastructure and human …

The Post-2015 Challenge for Development: A New EIB Instrument to take on Riskier Projects
Werner Hoyer, President European Investment Bank
As the post-Millennium Goals development agenda takes shape, the importance of ensuring adequate financing for development has been identified as a major issue. As UN Secretary General Ban Ki Moon said in August in his 500-day call to action, despite difficult budgetary circumstances the world must keep its financial promises …

Maximising the ‘Beyond Aid’ Approach: Mobilising Domestic Financial Resources for Africa’s Transformation
Bankole Adeoye, Director Corporate Services, NEPAD
Africa’s growth in the first decade of the new millennium propels the aspiration that the continent could serve as a growth pole for global prosperity and the next investment frontier. Undoubtedly, Africa is rising as a result of the decade old impact of transformative factors including deep-seated policy reforms in political and socio-economic governance. This has, in turn, enabled many African countries to experience higher growth rates …

More and Better Financing for Development
Erik Solheim, Chair of the OECD Development Assistance Committee
There is plenty of money in the world that could be used for development. Just stopping the enormous sums illegally flowing out of developing countries could provide billions of dollars for poverty reduction. Redirecting fossil fuel subsidies to renewable sources of energy would reduce the pace of climate change and more than double investments in green energy. Every child would be enrolled in school and teachers celebrated as …

Financing Challenges

Financing a Transformative Post-2015 Agenda: Where are the Current Discussions Taking Us?
Dr. Dirk Willem te Velde, Head of International Economic Development Group, and Leah Worrall, Project Officer, ODI
The financing for development conference in Addis Ababa in July 2015 is expected to agree a finance  for development framework to implement the post-2015 development agenda (the Sustainable Development Goals – SDGs), an agenda which itself is undergoing major discussions in the coming year. The European Report on Development (ERD) 2014 implementation in the post-2015 context’, and implemented by ODI …

How to Harness the Global Capital Markets for the Sustainable Development Goals
Dr. Steve Waygood, Chief Responsible Investment Officer, Aviva Investors
The purpose of this article, and the full report on which it is based, is to provide those involved in policy making with specific suggestions as to how they can move the capital markets onto a more sustainable basis. Adopting the conventional definition of sustainable development, we are seeking to promote: capital markets that finance development that meets the need of the present, without compromising the ability of future generations …

Should Sovereign Wealth Funds Finance Domestic Investment? The Opportunities and the Risks
Alan Gelb, Senior Fellow Center of Global Development,  Silvana Tordo, Lead Energy Economist, World Bank, and Håvard Halland, Natural Resource Economist, World Bank
 
Sovereign Wealth Funds (SWFs) now own over US$6 trillion in assets, about half of which belongs to resource-exporting countries. Responding to the funds’ objectives to sterilise large export windfalls, saving for future generations, and balance risks and returns, their holdings have traditionally focused on external assets, primarily securities traded in major markets but also property and other investments. Some SWFs with …

Illicit Financial Flows from AfricaSigns of a Poor integration into the Global Economy
Momodou Touray, Executive Director a.i. and Policy Advisor, AFRODAD
Whether one looks at the figures in absolute or relative terms, the outflow of illicit financial flows (IFFs) from Africa is staggering. Ever since the landmark study by the African Development Bank and Global Financial Integrity described Africa as a net creditor to the world of some US$1.4 trillion between 1980-2009, studies have proliferated on the subject. The significance of these figures is that they demonstrate the extent to … 

Public Funds to Mobilise Commercial Capital: The Example of the IFC Catalyst Fund
Reyaz A. Ahmad and Johanna Klein, IFC Catalyst Fund
Addressing climate change is a critical global challenge. The costs associated with mitigating climate change are immense; the International Energy Agency estimates investment of US$5 trillion is required by 2020 in clean energy alone to limit global warming to 2°C with additional investment required for adaptation to the effects of climate change …

Development Finance – Upside Down
Jyrki Koskelo, Managing Director of High Growth Emerging Markets, Atlas Mara Co-Nvest Ltd.
Though Africa is still often portrayed as a continent full of misery, Africa now contains 7 or 8 (depending on the source) of the world’s 10 fastest growing countries— a figure which we often forget. Another stunning statistic also comes from the continent: over 40% of Kenya’s GDP passes through MPesa, Kenya’s popular mobile payment platform. Indeed, over half of all mobile payments globally take place in Kenya. These are only … 

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This publication benefits from structural support by ECDPM’s following partners: The Netherlands, Belgium, Finland, Ireland, Luxembourg, Portugal, Sweden, Switzerland, and Austria.  

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Economic Transformation and TradeBusiness and DevelopmentDevelopment Finance