December 2015

MOOC Finance for Development Importance of new financial instruments to fund the Sustainable Development Goals

Image © AU-UN IST PHOTO

Image © AU-UN IST PHOTO

Background and Context

No consensus on the definition of development Development can be defined in terms of economic growth and

national income, human development (adult literacy, life expectancy, access to education etc.)

However, there is a general consensus that there can be no peace without development and no development without peace

It has also been agreed by global stakeholders that development needs to be sustainable and inclusive and this has led to the endorsement of the Sustainable Development Goals (SDGs).

The SDGs are the newly approved global development framework that is set to guide the development agenda of both the developed and developing world over the next 15 years.

It is believed that Official Development Assistance (ODA) will be a useful source of finance to help achieve the SDGs.

What is development?

• ODA are resource flows directed towards developing countries that are contributed by governments and international organisations such as the World Bank and the UN.

• ODA is critically important as these in-flows are targeted towards the poorest countries to promote economic growth and to help the poorest citizens get access to basic social services.

• ODA currently amounts to US$ 135billion is seen as critically important in financing the SDGs. However, these resources are not sufficient.

• Therefore, governments (developed and developing), development partners are tasked with mobilising additional resources.

• This is has led to the agenda of moving from billions to trillions.

Importance of ODA

• The proposed modes of acquiring additional finance includes;

• These additional resources will be used to finance infrastructure projects ranging from energy, roads, social services, agriculture and ICT.

Proposed New Sources of Finance

Public Resource Mobilisation- Taxes and Savings

Private Resource Mobilisation

Domestic Resource Mobilisation-Combating illicit financial flows

Insurance and Capital Markets

Bonds- Vaccine, Diaspora, Climate, Catastrophic, Pandemic

Leveraging of these new sources of finance

• The process of leveraging the new sources of finance needs a consolidated effort of the following stakeholders

• It is Important to create public awareness on the role SDGs so that citizens may provide oversight for their respective governments.

Developed Countries e.g. United States, Germany, France

Emerging Economies- Brazil, Russia and China

Developing Countries e.g. Kenya, Nigeria and Morocco

Multilateral Development Banks-World Bank, UN

Regional Development Banks e.g. African Development Bank

Thank You!

Image © AU-UN IST PHOTO/Ilyas A. Abukar