Towards 2030: Financing development in Africa

The year 2015 saw three international summits, from which emerged an overarching framework for ensuring global sustainable development in the post-MDGs era, and agreement on mechanisms for financing the efforts towards attainment of the goals and targets therein.  

Building on the outcomes of two previous international financing for fevelopment conferences - in Monterrey, Mexico, 2002, and in Doha, Qatar, 2008 - the Third International Conference on Financing for Development held in Addis Ababa in July 2015 agreed a series of measures to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges. The outcome, the Addis Ababa Agenda for Action (AAAA), therefore set the tone for two subsequent meetings, the post-MDGs summit held in September 2015 from which emerged Agenda 2030 and the 21st Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) held at the end of the year.

Taken together the set of agreements represent a bold renewed effort to fight poverty and ensure sustainable development the world over. Anchored on the principle and new focus on “leaving no one behind,” Agenda 2030 holds much promise, if progress is tangible, governments deliver on their commitment for transformative development, and all citizens – including the most vulnerable and marginalized – are enabled to participate in the governance of development, and can hold their governments to account and claim their rights.

Celebrated as this renewed vision for development is, it is worth noting, however, that the global talks of 2015 left unresolved a number of key issues on financing for development, none more critical than the failure to agree a new global and fair tax system. In addition, talks also failed to sufficiently challenge and rectify the failure by developed countries to meet their commitments to financing development through overseas development assistance (ODA). Greater room was given to the involvement of the private sector in development, albeit without adequate safeguards for ensuring that the private sector – especially global corporates – deliver adequately on their developmental mandate in the developing world.   

Moreover, little attention was given to the fact that although there has been a global upward trend in ODA in recent times, aid to Sub-Saharan Africa has actually fallen back to levels the levels of a decade ago. This is happening against a background of a long history of developed countries’ failure to meet the UN target for development aid of 0.7% of GNI, recouping on odious debt and decades of turning a blind eye to the scandal of illicit financial flows which continue to bleed Africa of billions of dollars in much needed development finance.

Therefore, despite the celebratory fervour of development’s landmark year 2015, radical change remains needed in the global development finance architecture to make it fair and just. Rebalancing of the development finance landscape is necessary if we are to achieve the transformative shift envisaged in the Agenda 2030 and which forms the core of the African transformation agenda set out in Agenda 2063, the new shared continental socio-economic transformation framework, and its continental programmes embedded in NEPAD.

The focus on ‘leaving no one behind’ - ensuring that development and its benefits are tangible for women, children, youth, people living with a disability and other hitherto disadvantaged groups - should guide every effort and investment in the new development regime.

Lastly, the implementation of Agenda 2030 will not be easy. Over and above actions by governments and citizens, mechanisms need to be in place to ensure follow up and reporting at all levels from the local to the global. Currently existing platforms such as the Global Platform for Effective Development Cooperation provide ready mechanisms for such follow up, monitoring and reporting at all levels and urgent efforts are needed to outline a role for such mechanisms in the new development agenda.

Against this background, this issue of Pambazuka News brings you analysis and commentary by experts, most based on the continent, looking at these issues and outlining what it will take for Africa to achieve its much sought after transformation in the post-MDGs era.

The issue kicks off on the subject of ‘leaving no one behind’ as Bob Libert Muchabaiwa argues that insufficient, ineffective and inequitable public spending on child-focused sectors and programmes stands as the biggest barrier to enjoyment of rights by all children in Africa and beyond. Muchabaiwa bemoans the failure of African states to meet key commitments made on financing health and education, and emphasises that although Agenda 2030 has pledged not to leave anyone behind, and through Agenda 2063 African governments have committed to “put children first,” the challenge is to make this happen, in large part through delivering on the necessary financing for the required investment in children.

Brenda Muturi continues on the theme of leaving no one behind, arguing that despite Africa’s stellar record in enacting progressive policies and frameworks on key issues, including on gender equality, one of the key reasons why the continent is yet to effectively tackle prevailing gender inequality, a key driver of poverty on the continent, is the lack of political will to make substantive and concrete financial commitments to achieve gender parity. She offers succinct remedies that if followed should herald an era of progress and prosperity for African women and girls.

Moving to investment in key sectors in the African economy, Jessica Mwanzia and Andrew Osiany, team up to reflect on the status of African agriculture and progress made, or lack thereof, in the revitalisation of the agriculture sector in Africa under the much celebrated Comprehensive Africa Agriculture Development Programme. They conclude that African governments have not done enough to invest in and transform agriculture, increase food productivity, create decent employment for African youth and provide economic incentives from agriculture for small holder farmers, particularly small scale women farmers. Mwanzia and Osiany expose consequent inequalities in Africa’s food systems, and offer a battery of recommendations towards greater, more meaningful investment and true transformation of this key sector in Africa.

Tigere Chagutah looks at another key area for Africa’s transformation, infrastructure development, and argues that investment in infrastructure will need to benefit all, if the transformation envisaged is to be fully realised. Chagutah outlines the key deficiencies in emerging financing models and approaches to infrastructure development in Africa, arguing that greater emphasis on private sector driven models holds great risks for poor and marginalised communities who remain mired in poverty and increasingly face the deleterious effects of rising inequality on the continent. Chagutah concludes that if real transformation is to be achieved, infrastructure development, and the approaches chosen to finance it, must serve the people and bring much needed essential services and greater access to clean energy and transport nearer the poor and marginalised. 

Shining the light on sources of financing Kwesi Obeng chronicles how Africans have been robbed of their wealth through ‘clever – or treacherous – accounting’ by greedy multinational corporations. The situation is exacerbated by a dereliction of duty on the part of African governments in their failure to retain the requisite tax and non-tax revenues from operations of global corporate players in Africa, especially those in the extractive industries. Obeng decries the weak and inadequate global efforts to reign in rampant tax dodging by global corporates and wealthy individuals, and urges Africans to unite in a broad and strong push for long overdue global tax reforms.

Julie Seghers looks forward to the opportunities held by the upcoming second High-Level Meeting of the Global Partnership for Effective Development Cooperation to be held in Nairobi from 28 November to 1 December 2016. She asks how can we “do” development better? and in seeking for answers emphasizes that it is clear that “business as usual” is no longer an option if we are to deliver the Sustainable Development Goals and leave no one behind. Seghers observes that the Nairobi meeting will therefore provide a unique opportunity to hold all development players accountable against commitments for more effective development, especially the failure by traditional aid donors to uphold longstanding commitments on delivering more and better aid.

Willem Fourie picks up on the subject of development partner behavior arguing that the integrity of overseas development assistance must be preserved if aid is going to play the role ascribed to it in the ongoing fight against entrenched poverty on the continent. In addition to meeting commitments made, Fourie argues strongly for the global development polity to recover the moral foundations of ODA.

Tigere Chagutah returns to round off our special issue by arguing that while aid to Africa will remain important for a number of countries in the near to medium term, the answer to the continent’s development financing problems lies increasingly less in the delivery of aid from traditional donors but largely in unlocking Africa’s domestic resource potential, so that the continent can harness and better manage more of its own revenues for development. Chagutah highlights the power of domestic resources – primarily tax – to contribute to building and strengthening a new social contract between the state and its citizens, and concludes that better value for aid investments will therefore arise where ODA is used to advance the rights of citizens and to build the capacity of African countries to finance and sustain their own development, and thus move beyond aid dependency.

We hope you will enjoy this instalment of Pambazuka News and look forward to your feedback.

* Tigere Chagutah, PhD. Guest Editor.