Uganda’s High Level dialogue on financing for development prioritises domestic resource mobilisationJul 20, 2015
Kampala - Africa will have to look inward to finance its development if it wants to achieve the new Sustainable Development Goals (SDGs) framework that will be signed by world leaders at the September 2015 General Assembly.
This was pointed out by Dr. Carlos Lopes, the Executive Secretary for the United Nations Economic Commission for Africa (UNECA) during a high level dialogue on financing for sustainable development in Uganda, the first of its kind since the Addis Ababa Financing Framework for SDGs was agreed on last week.
Delivering his keynote address at the dialogue, Dr. Lopes said that domestic resources are an important yet undervalued contribution to Africa’s development financing.
“Tax revenue is only second to export earning in terms of development financing in Africa and dwarfs the annual combined total of remittances, Foreign Direct Investment and Overseas Development Assistance,” he said, adding that, “in 2012, the continent generated US$527bn from domestic taxes.”
Although currently remittances, Foreign Direct Investments, and Official Development Assistance (ODA) constitute the largest source of external inflows to Africa they each have their own challenges. Remittance transfers are still charged highly, Foreign Direct Investments still need to diversify in terms of destinations and sectors while ODA has been reducing with no new commitments coming up.
Dr. Lopes however said that to be able to scale up sources of domestic financing, domestic agencies need to be properly managed and empowered.
“Investments need to be made in tax administration, roping in the eligible informal sector entities and stemming the tide of illicit financial out flows which the Addis Action Agenda commits to substantially reducing by 2030,” he expounded.
Public Pension fund assets, international reserves, earning from extractive sectors, domestic savings and the Private equity markets constitute other important sources of development financing.
Agreeing with him, Hon. Sam Kutesa, the President of the UN General Assembly, who was also in attendance, reiterated that the active involvement of the private sector would be essential in financing and implementing the new development agenda in Uganda.
“With the banking sector in Uganda almost entirely private, efforts to enhance private sector involvement in supporting sustainable development should include lowering interest rates on loans for key sectors of the economy such as agriculture,” Hon. Kutesa pointed out.
He highlighted that other key areas that that would generate more resources with greater effort included commercialization of agriculture, robust tourism marketing and value addition to minerals, oil and gas.
Ahunna Eziakonwa-Onochie, the UN Resident Coordinator and UNDP Resident Representative in Uganda emphasized the importance of mobilising and putting resources to their intended use if the country wants to achieve both the National Development Plan II and the SDGs .
“Africa is ready, it has the means and what it needs is the leadership, ambition and will to deliver transformation to its people,” Dr. Lopes said as he wrapped up the discussion.
Tony Muhumuza, UNDP Uganda - National Economist, Tel: +256 417 112169, Email: firstname.lastname@example.org