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Friday 18 January 2019
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Financing for Africa’s Transformation

Dr. Carlos Lopes
As the race to achieve the Millennium Development Goals (MDGs) draws to a close, the momentum will only intensify as the baton passes to the post-2015 development agenda, including global goals for people and planet to be adopted by world leaders in September at the Headquarters of the United Nations. How ready is Africa to embrace this ground-breaking universal development agenda?
The past 15 years have been a journey of change for the continent. Despite starting at the lowest point on the MDG targets, African countries have done exceptionally well thanks to political determination and tremendous efforts. While not all of the Goals have been met, Africa can celebrate achieving some significant targets, such as halving the prevalence of underweight children under the age of 5 and considerably reducing the number of AIDS and malaria-related deaths. Africa has also experienced strong economic growth averaging 5% per annum, consistently outperforming global economic trends.
Notwithstanding these gains, many hurdles remain to be overcome if the continent is to get ahead and stay ahead. One of the most pressing is harnessing the energy and talent of its people, particularly its youth and women, as well as closingthe growing inequality gap and reducing income poverty and unemployment. Challenges such as these are holding back the continent’s productive potential.
Indeed, 8 of the world’s top 10 best performing countries are in Africa. But growth on its own is simply not enough. A compelling change is required – one that will transform the continent and put it on a path of transformative growth, in line with the vision set out in Agenda 2063. Africa needs a policy paradigm that will generate jobs and livelihoods, empower its women, and equip its youth with essential skills. This is vital for poverty reduction, social cohesion, political stability and productive growth. Sustainable development will depend on economic structural transformation, with a strong industrial and agricultural base supported by infrastructure, investment in people and protection of the planet. The impact of unsustainable practices is often felt most by women, youth and the most vulnerable, who are at the forefront of the water, food and energy nexus. Economic growthwill only help to further social progress if the environment is protected. Only then can the continent compete fairly in the global market, increase its share of the world’s wealth and deliver tangible benefits for its people.
The continent’s priorities in the African common position on the post-2015 development agenda and in Agenda 2063 have found congruence with the proposed sustainable development goals. These instruments will remain mere rhetoric, however, if the continent does not foresee the necessary means to turnthis vision into reality.The real change required is to rise to the challenge with adequate, predictable and sustainable financing to drive this opportunity for powerful transformation.
The financing requirements for sustainable development in Africa are high but a policy paradigm will allow us to shift and unlock resources to finance this transformation. With declining development aid and the changing ecology of global development finance, there is consensus that aid must complement rather than be a substitute for Africa’s development aspirations, as was the case in the past. The solution lies in exploring innovative sources of financing. These can be leveraged from new partnerships, innovative instruments for domestic resource mobilization, the private sector and sources of climate finance.
Measures to unlock money at the national level include devising financing instruments that enable the integration of Africa into international financial markets and that facilitate intra-African trade, such as private equity; strengthening the role of bond markets, pension funds and sovereign wealth funds to boost investments; improving the policy base and regulatory environment, from tax administration to legal reforms, including those governing the investment of public funds and international reserves of central and reserve banks; and building the requisite human, technological and institutional capacities. At the global level, financial and economic governance must also be reformed to improve the conditions of access to capital markets; to intensify international cooperation for transparency in Africa’s extractive industries; to tackle illicit capital flight, which deprives the continent of at least $50 billion a year; and to expand Africa’s fiscal space.
The upcoming third International Conference on Financing for Development in July, the adoption of the post-2015 development agenda, including the sustainable development goals, in September, and a meaningful climate change agreement due in December are pivotal. Together they offer a chance to renew the universal commitment on eradicating poverty irreversibly, addressing inequalities and protecting the planet, including through climate action that will put the world on an ambitious path of sustainable development.
Africa is ready. It already has the means; what it needs now is the leadership, ambition and will to deliver transformation to the people of Africa.

*Dr. Carlos Lopes is the Executive Secretary of the United Nations Economic Commission for Africa. Carlos Lopes holds a PhD in history from the University of Paris 1 Panthéon-Sorbonne and a research master from the Geneva Graduate Institute of International and Development Studies.




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