ADDIS ABABA, Ethiopia, 7th October 2014, -/African Media Agency (AMA)/- Marrakech will host a number of African leaders as part of the UN’s 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.
This is the first time the event is 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.
Since the late 1990s, many African economies have grown significantly, and a number of countries continue to benefit from accelerating growth rates. Between 1995 and 2012, the continent’s gross domestic product (GDP) doubled in real terms, from $656 billion to $1,369 billion, while GDP per capita increased by 40 per cent, from $917to $1,265. Impressive as these figures are, a number of challenges continue to impede Africa’s transformation, the key one being Africa is still dependent on overseas aid.
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 costs of safeguarding Africa’s natural resources, which continue to underpin most growth in the continent, are also increasing.
Speaking about how African countries can raise funds, Carlos Lopes, Executive Secretary, the ECA said, “For developing countries to access the funds they require, they must strive to mobilize additional financial resources, including by accessing financial markets, while developed countries must honour the financial commitments they have made in international forums. 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.
A number of high level participants are expected. H.E. Mr. Mohamed Boussaid, Minister, Ministry of Economy and Finance, Morocco; H.E. Ms. Kaba Nialé, Minister to the Prime Minister in charge of Economy and Finance, Côte-d’Ivoire, Mr. Beker Shale, Director General, Ethiopian Revenue and Customs Authority, and Prof. Machiko Nissanke, Professor of Economics, School of Oriental and African Studies, University of London will discuss enhancing the role of Governments with a view to attracting greater private equity investments in support of national development efforts.
Meanwhile, H.E. Mr. Anis Birou, Minister in charge of Moroccans living abroad and migration affairs, Morocco; Dr. Esman M. Nyamongo, Research Department, Central Bank of Kenya, Ms. Faiza Feki, Director General of Foreign Exchange, Central Bank of Tunisia, Ms. Aida Diarra, Regional Vice President, North, Central and West Africa, Western Union and Mr. Abdellatif Jouahri, Governor, Central Bank of Morocco will discuss how African countries can raise funds by means of remittances and diaspora bonds.
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 underutilised sources of taxation, African countries can increase tax revenue significantly,” says Abdalla Hamdock, Dy Executive Secretary, 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.
Distributed by African Media Agency (AMA) on behalf of the United Nations Economic Commission for Africa (UNECA).