Star Africa
Marrakesh will host a number of African leaders as part of the 9th African Development Forum. The Forum takes place every two years and is organised by the Economic Commission for Africa (ECA), Africa’s most important policy think tank.
A press release issued here Wednesday says this is the first time the event is being held outside Addis Ababa, Ethiopia, where the ECA is headquartered and this year the Forum will discuss innovative ways to fund Africa’s transformation at the 9th African Development Forum.
According to reports and ECA findings, Africa requires approximately $200 billion annually to finance sustainable development, promote climate change adaptation and mitigation, and enhance economic resilience and competitiveness. Africa’s infrastructure requirements alone are estimated at some $90 billion per year.
The continent must embark on reforms to capture currently unexplored or poorly managed resources. This includes curtailing illicit financial flows and rather transforming those funds into a powerful tool for enhancing domestic resource mobilization, as a way of furthering the continent’s development.
The good news is the potential for Africa to raise substantially more domestic financial resources and to finance its development from these resources is huge. Concrete results are within reach, even within a short time frame, if the appropriate innovations and support are put in place.
“Government tax revenue constitutes the most significant source of domestic resources for the implementation of development programmes on the continent and there is significant potential for scaling up returns. The lesson emerging from country experiences is that by focusing on expanding the tax base, improving tax administration and tapping relatively under utilised sources of taxation, African countries can increase tax revenue significantly, says Abdalla Hamdock, Deputy Executive Secretary of the ECA.
Domestic tax revenues mobilised in Africa today are in excess of $520bn (2011 figures), compared to the $50bn received in aid. What’s more, African central and reserve banks hold more than $400bn in international reserves and Africa’s pension fund assets are growing at a staggering pace. The World Bank estimates that Africa’s diaspora remittances soared to $40bn in 2012 and they have the potential to grow to $200bn over the next decade. Added to this is the potential that can be realised by addressing the losses to the continent through illicit financial flows.
For Africa to own its development, however, the continent needs to define a new robust threshold for domestic resource mobilisation that will enable the implementation of at least 70-80% of its development programmes and projects. The Forum will discuss how this can be achieved.
