The Third International Conference on Financing for Development is set to take place on the 13-16 July 2015 in Addis Ababa Ethiopia, and for Africa it comes at a time when Africa’s development prospects are guarded by optimism. This optimism is stipulated in the ‘joint African Union Commission (AUC) – Economic Commission for Africa (ECA) elements paper for the regional consultation on financing for development’. This article therefore analyses Africa’s approach towards the Third International Conference on Financing for Development based on the goals of the African Union (AU) Agenda 2063 and the need to create a suitable financial system at the national and regional level to support the mobilization of domestic resources.
The purpose of this Conference is to ‘assess the progress made in the implementation of the Monterrey Consensus of the International Conference on Financing for Development and the Doha Declaration on Financing for Development, and to reinvigorate and strengthen the financing for development follow-up process’.1 It is meant to complement the implementation of a transformative Post-2015 Development Agenda which is set to be launched towards the end of 2015 to replace the Millennium Development Goals (MDGs).
It is anticipated that some of the goals of the financing for development conference would seek to strengthen required development frameworks with concrete deliverables, scale-up resources and commit to a renewed global partnership for development. This includes significant elements on poverty eradication, equitable distribution of wealth especially with regard to women’s empowerment and promotion of human rights.2 In the process this would also include achieving sustainable development through promoting inclusive economic growth, protecting the environment, and promoting peaceful and inclusive societies.
The Agenda 2063 desires a prosperous Africa to be attained through inclusive growth and sustainable development, which includes job creation; increasing agricultural production; investment in science; technology; research and innovation; gender equality; youth empowerment and the provision of basic services such as health, nutrition, education, shelter, water and sanitation.3 Accordingly, while the third International Conference on Financing for Development would seek to provide attainable benchmarks for sustainable and inclusive development, for Africa it is imperative to link the conference’s expected developmental initiatives that are complementary with the AU Agenda 2063.
Optimistically this is also stated in the joint AUC-ECA paper on financing for development. In the paper it is said that Africa’s positivity on its development priorities are ‘attributed to Africa’s sustained average growth rate of approximately 5 percent over the past decade driven in part by stronger natural resource exports, robust domestic demand, rising foreign direct investment and remittance flows, and improved economic and political governance on the continent.4
However, there’s a need to strengthen Africa’s financial systems and this is something that African countries would have to mostly focus on in the international financing for development meeting. The Addis Ababa draft5 accord on Financing for Development promises to push for cohesive nationally owned sustainable development strategies which will also be supported by an integrated national financing framework. From an African perspective this is a great initiative, as African countries need to take advantage of the conference to find a suitable financial system.6 This was echoed by Ethiopia’s State Minister of Finance and Economic Development, Mr Abraham Tekeste who argues that it is possible for Africa to grow sustainably with the right financial system, and this must also be linked to the importance of ‘domestic resource mobilization’ of people and financial resources.7 According to the joint AUC-ECA paper, the importance of domestic resource mobilization is attributed to the fact that “reliance on domestic resources reinforces a country’s ownership of public policy and strengthens accountability; domestic resources can spur a more effective use of development financing; external resources are not only unpredictable and erratic, but would not be sufficient to meet Africa’s development financing needs; most donor countries have failed to live up to their long-standing commitments” . Furthermore, achieving these objectives would also depend on the capacity of African countries in providing good governance and monitoring mechanisms within their financial systems to support Africa’s sustainable development based on the mobilization of domestic resources.
Consequently, while there are many factors that contribute to Africa’s development objectives, the aforementioned facts are some of the reasons that require African countries to re-evaluate and strengthen its financial system, and to effectively encourage sustainable development based on domestic resources and Africa’s financial institutions.
1 Joint African Union Commission – Economic Commission for Africa elements paper for the regional consultation on financing for development
2 Zero draft of the outcome document of the third International Conference on Financing for Development (16 March 2015) www.un.org/esa/ffd/wp-content/uploads/2015/03/1ds-zero-draft-outcome.pdf
3 Agenda 2063, The Africa We Want
4 joint African Union Commission – Economic Commission for Africa elements paper for the regional consultation on financing for development
5 Revised draft of the Outcome document of the Third International Conference on Financing for Development (7 May 2015) http://www.un.org/pga/wp-content/uploads/sites/3/2015/05/070515_financing-for-development-Inf-Consultations.pdf
6 African development needs a suitable finance system http://www.uneca.org/stories/african-development-needs-suitable-finance-system
Mr. Kenny Dlamini holds a BA Hons in Political & International Studies from Rhodes University and is a research assistant at the Institute for Global Dialogue associated with UNISA. His views do not necessarily reflect those of the IGD