Latest news with #ResourceMobilization
Zawya
2 days ago
- Business
- Zawya
Aid won't close Africa's $1.3 trillion Sustainable Development Goal (SDG) gap
Foreign aid is no longer a viable solution for Africa's growing development needs. The continent's annual Sustainable Development Goal financing shortfall has reached $1.3 trillion, and leaders are increasingly clear-eyed about the limits of donor-driven models. At a high-level session on the margins of the 2025 UN High-level Political Forum, African leaders called for structural reforms to expand domestic resource mobilization, build regional value chains and shift away from exporting raw commodities. 'Aid won't close the gap. We must stop exporting raw materials and importing poverty,' said Claver Gatete, UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa (ECA). He called for greater investment in manufacturing, green industries and youth-led enterprises. More than 80 percent of Africa's exports remain unprocessed, a model he described as unsustainable. Mr. Gatete was speaking at a session organized on the margins of the 2025 High-level Political Forum on Sustainable Development in New York. The event, co-hosted by the Government of Uganda and the ECA, focused on how to translate the Kampala Declaration, adopted at this year's Africa Regional Forum on Sustainable Development (ARFSD), into concrete action. Uganda's Prime Minister Robinah Nabbanja said the continent was 'dangerously off track' but highlighted progress made in her country, including reductions in maternal mortality, gains in gender equality and increased national budget allocations linked to the Sustainable Development Goals. 'The Kampala Declaration is practical,' said Ms. Nabbanja. 'We're proud to host this conversation and to take it forward in terms of implementation.' Her remarks underscored a broader shift toward self-determined development. Uganda chaired the ARFSD Bureau in 2025 and has introduced measures to align domestic planning with regional and global frameworks. Despite this, debt pressures, limited access to concessional finance and the high cost of capital continue to challenge many African economies. Mr. Gatete reiterated ECA's support for the creation of an African Credit Rating Agency, arguing that current international rating practices distort risk and restrict access to affordable capital. He also called for scaling blended finance mechanisms, issuing local currency bonds and digitizing tax and revenue systems to boost efficiency and compliance. He noted that inclusive growth also depends on people-centered investments. 'We must stop viewing youth as recipients of development and start recognizing them as drivers of it,' he said, emphasizing the need for vocational training, digital skills and youth entrepreneurship. Selma Malika Haddadi, Deputy Chairperson of the African Union Commission, said the Kampala Declaration represents more than a political commitment. 'It is not just about potential. It is about will,' she said. 'Partnership is not patronage. It must be grounded in mutual recognition and institutional respect.' She warned against 'performative partnerships' and called for better alignment between global funding frameworks and Africa's priorities. Ms. Haddadi cited progress on regional integration, including the rollout of the Pan-African Payment and Settlement System and implementation of the African Union's climate finance strategy. With fewer than five years remaining to achieve the 2030 Agenda for Sustainable Development, and with the second ten-year plan of Agenda 2063 now underway, speakers agreed that declarations must be backed by systems capable of delivery. The Kampala Declaration, they said, provides a roadmap, but only coordinated action will close the gap. The event drew senior-level representation from across the continent and the UN system, including Uganda's Minister for General Duties, Justine Kasule Lumumba; UN Special Adviser on Africa, Cristina Duarte; and other experts and policymakers engaged in development financing, innovation and regional planning. 'The future we want will not be given to us,' Mr. Gatete said. 'It must be built. And we must build it now.' Distributed by APO Group on behalf of United Nations Economic Commission for Africa (ECA).
Zawya
6 days ago
- Business
- Zawya
Africa's financial sovereignty: Mobilizing institutional capital for development and resilience
As global capital flows evolve and development assistance dwindles, Africa finds itself at a critical point. On 28 May, during the African Development Bank Group's 2025 Annual Meetings ( senior leaders, policymakers and financial experts gathered to chart a new course for the continent's financial future – one based on mobilizing and deploying African resources and ingenuity. Organized by the Bank Group's Resource Mobilization and Partnerships Department, in collaboration with the Bank's Making Finance Work for Africa initiative, this side event brought together leading African experts in a conversation moderated by Victor Oladokun, Senior Advisor to the President of the African Development Bank Group for Communication and Stakeholder Engagement. With a 10 percent decline in development assistance and a 12 percent drop in foreign direct investment to USD 40 billion {in what period, and what's the source of the data?}, the urgency of mobilizing domestic resources is pressing. The continent faces an annual infrastructure funding gap of between USD 68 billion and USD 108 billion, while attracting only 2 percent of global investment in this sector {Source?}. "The real question is not whether the capital exists – it does. The question is how to mobilize it on a large scale for productive, high-impact investments," said Solomon Quaynor, the African Development Bank Group's Vice-President for Private Sector, Infrastructure&Industrialization. He added, "Africa is not poor. Our institutional investors – pension funds, sovereign wealth funds, insurance companies, and even central banks – together manage more than USD 2.1 trillion in assets. If just 5 percent of these funds were directed towards infrastructure and the private sector, it would unlock more than USD 100 billion in long-term capital for the continent." Partnerships and innovation The event highlighted some innovative African-led models for mobilizing institutional capital. For example, InfraCredit Nigeria, a pioneering credit enhancement institution, has secured more than USD 300 million in long-term financing in local currency for infrastructure projects. "The real risk associated with infrastructure assets is often overestimated. We have not recorded any losses on a portfolio of more than 20 projects in 12 sectors in eight years," said Chinua Azubike, CEO of InfraCredit. Tafara Ethiopis, Vice President of the International Finance Corporation (IFC, the World Bank's private-sector arm) for Africa, emphasized the need to strengthen the bankability of projects through more effective risk-sharing mechanisms. "It is essential to calibrate the distribution of risks and benefits between the public and private sectors properly to make projects bankable," he said. Speakers also identified obstacles to mobilizing institutional capital and proposed solutions. Boitumelo Mosako, CEO of the Development Bank of Southern Africa (DBSA), highlighted the central role of good governance and rigorous project preparation in lowering risk and improving investor confidence. The Director General of Nigeria's Securities and Exchange Commission (SEC), Timi Agama, stressed the importance of building trust through regulatory reforms, investor protection and financial education. Denis Charles Kouassi, CEO of Côte d'Ivoire's National Social Security Fund, underscored the importance of aligning pension funds with national development priorities, saying, " All the income we generate is reinvested directly into the national economy to finance our services and boost growth." A call for collective action The Resource Mobilization and Partnerships Department of the African Development Bank Group is leading several initiatives aimed at mobilizing African institutional capital, including through instruments such as the Capital Markets Development Trust Fund, and strategic partnerships with regional and global stakeholders. 'Yes, we need governance and accountability. But as Africans, we also need to learn to trust each other,' said Mosako. "The moment calls for vision. It also calls for innovation. And above all, it calls for action,' Quaynor affirmed, in his concluding remarks. 'Let us pool our capital, our ideas, and our will, to build an Africa where infrastructure becomes a lever for prosperity, not a drag on it." Distributed by APO Group on behalf of African Development Bank Group (AfDB). To view photos from this session, click here ( About the African Development Bank Group: The African Development Bank Group is Africa's leading development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Represented in 41 African countries, with an external office in Japan, the Bank contributes to the economic development and social progress of its 54 regional member countries. For more information:
