Financing for development: The state of the debate in Africa

Against the backdrop of intensive global negotiations on the post-2015 sustainable development agenda, it seems opportune to look at the state of the debate on Financing for Development (FfD) in Africa. The latest meeting, which was jointly organised by the African Union Commission (AUC) and the Economic Commission for Africa (UNECA) in Addis Ababa on 30-31 March, provides useful insights on how Africans are thinking about FfD – including, but not exclusively, on the post-2015 agenda. Which direction to Addis? Under the theme ‘Implementing Agenda 2063 - Planning, Mobilising and Financing for Development’, African experts and Ministers of Finance, Planning and Economic Development tackled the issues of FfD, covering both the financing of Agenda 2063 and financing the post-2015 framework. The Ministers subsequently endorsed the draft document entitled Financing for development: Africa’s perspectives. The document is a living document and is likely to be further developed in the lead up to the 3^rd International Conference on Financing for Development in July. Table 1 below provides a summary of the key components of this position as detailed in the Joint African Union Commission- UNECA paper for the African regional consultation on financing for development: Table 1: Key components of the African Position on Financing While African governments generally acknowledge the support provided by Official Development Assistance (ODA) - and continue to call on traditional donors to fulfil their commitments - there is increasingly widespread conviction that structural transformation needs to be based on ‘home-grown’ domestic resources. Both sources need to compliment each other in a strategic way. For example, African ministers backed the use of ODA and technical assistance for tax reform and public financial management in the lowest income countries in the hope that it can help domestic resource mobilisation (DRM) efforts in the long run. Furthermore, in order to allocate resources effectively, and finance initiatives where they are most required, there is need for reliable, transparent and timely statistical indicators - strengthening the case for an African “data revolution” - and to target financial support and capacity building to this end. Only then can there be sufficient collection and publication of high quality data that monitors and tracks economic and social targets more effectively in support of development objectives. Tapping Africa’s wealth Recent recognition of African resources available to finance its own development plans have stepped up a gear to more proactive calls to actually start tapping into this wealth for sustainable socio-economic development. The Committee of Experts meeting in Addis Ababa, noted in this respect that “[a]lthough African Governments have applauded and reiterated their commitment to the principles endorsed at both the Monterrey and Doha meetings, the decade following the Monterrey meeting highlighted some fundamental gaps in development financing, particularly for African countries pursuing structural transformation”. The adoption of the Agenda 2063 and the run up to the Sustainable Development Goals (SDGs) Summit in September, as well as financing issues within the continent, have put the issue of ‘Domestic Resource Mobilisation’ (DRM) back on the table. During the AU-ECA conference, a range of ideas were brought forward - including increased taxation, improved public financial management, private sector development and curbing illicit financial flows (IFFs). Seizing the opportunity African countries have been working extensively towards developing a common position on development financing as it is not only seen as a way to tackle the issues related to the Means of Implementation of the SDGs, but also as a way to support the financing of the Agenda 2063. With respect to the latter, the priorities of the SDGs are already very much in line with those articulated in the Common African Position (CAP) on the post-2015 development agenda attempts. Africa’s increased interest in financing its own development is a step in the right direction and in line with international agreements it has signed up to, like the Monterrey Consensus and Doha Declarations - the two predecessors to the FFD3 conference. The discussion around the future of financing for development provides a golden opportunity to support the efforts being undertaken on the continent to promote development. Ultimately, this becomes a responsibility of the local actors themselves. The views expressed here are those of the author and not necessarily those of ECDPM.