Financing for Development ‘missing a Blair or Clinton’

Financing for Development ‘missing a Blair or Clinton’

Prominent global heads of state may have shunned this week’s Financing for Development summit in Addis Ababa, but anti-poverty groups are continuing to push for progress on key development goals. 

ONE’s Jamie Drummond and Sipho Moyo talk to African Business about some of the priorities they would like to see tackled by summit delegates.   

What are the areas you would like to see progress on at Financing for Development?

Sipho – Our key areas for Financing for Development are domestic resource mobilisation via tax revenues, reducing the tax GDP ratio and increasing the tax revenue through better management of natural resources and cracking down on illicit financial flows. And then on the donor side what we’re asking is first of all to keep the 0.7% commitment. 50% of the ODA should go to the least developed countries because that’s where the poorest people are and that’s women and girls who are mostly impacted. And then there’s a social protection package that we’re proposing, it’s a general social protection package but it’s between 300 and 500 US dollars per person; and the dollar is defined by purchasing parity.

Then there’s the data revolution, which is actually key to everything, just in terms of being able to monitor what’s going on, being able to measure the success and the progress, and being able to just work with facts. It’s things like strengthening the national statistical offices in many of the countries; we’ve got this idea of engaging this army of numerators that actually are at the point of service delivery and collecting data in real-time, and feeding it into a system.

Jamie – There’s a couple of things on the data sector, one is forming an open data charter, so it would be about the governance of data, because on the one hand people can be open about transparency, on the other hand people are worried about privacy and snooping, so we want to set some governance norms. We’re organising an event in Addis with key government CSOs and foundations where people make pledges and commitments about investing in better statistical systems, making data more open and commitments to make datasets interoperable so that investigative journalists can follow the money trail much more easily than they can today – it’s called Follow the Money Partnerships. So the idea is that the data revolution will underpin the financing of development and the outcomes that financing is supposed to achieve.

Are the poorest going to be targeted with the social package?

Jamie – There’s a billion around the world who live on under $1.25 and there’s about 414 million in sub-Saharan Africa. But exactly how many there are is very hard to answer because actually we have very bad data about them. So of the 414 million, over 100 million we don’t really know because they live in countries where we’ve got very bad data, like the datasets are at least ten or more years out-of-date.

What should Africa target other than simply asking for more money?

Jamie – Automatic information exchanges, more capacity building for tax revenue collection authorities, transparency in the extraction and natural resource governance sectors, and public registers for the beneficial ownership of companies. That’s extremely important and not something that many African governments talk about naturally. And there are special ratios which countries can be expected to achieve in terms of tax to GDP. Depending upon your level of development it slightly goes up and so a country should hit between 20% and 24%. So countries basically depending on their level of economic development should try to achieve their potential and quite a few African countries are below that. It should be 20% at a basic minimum. And that difference is a lot of money.

Is Addis Ababa being taken seriously enough by important players?

Jamie – I think we’re quite concerned about Addis, it’s not looking great in terms of the level of attendance, in terms of the seriousness with which countries are taking it, African and global. Why that is happening is a little unclear. I think for example traditionally the British have been quite good at these moments but because of the election they weren’t around. Nigeria has been distracted, South Africa’s not that interested, Ethiopia would normally have been a better host but they’ve had an election, there’s various different factors in different places. Obama is very interested and focused and will be in Kenya the week after, so there’s a bit of a question about whether he might see enough value to try and go to Addis a little earlier, he may, he may not, we’re hoping at least Jack Lew will go. So getting the right level of attendance and making sure it’s at least the finance minister, preferably heads of state rather than development minister level or sub-finance minister and that’s quite hard at the moment. I think there’s only one real serious player at head of state level which is François Hollande.

There’s a lack of leadership.

Jamie – There’s a lack of leadership and there’s a missing Blair, Brown, Clinton or even Bush – a Meles Zenawi or Thabo Mbeki, for better or worse.

Sipho – On the 300 to 500 envelope, we and other partners are putting it forward but the donors are saying they want to hear it from the African leaders. The African leaders are not really pushing it very much, so we need to try and get them to do that, especially the LDCs, and the poorer countries such as Benin and Tanzania.

Jamie – One historical irony is that the first day of the Financing for Development Summit is exactly 30 years to the day since the Live Aid concerts which were about Ethiopia. So one way of presenting it is to put the nail in the coffin of the old Live Aid legacy. Ethiopia is hosting the Summit, it’s not just about aid it’s about financing in a holistic way for development. 

In terms of quantity of financing we’re quite worried. It’s not like aid is going to be massively cut, it’s just not going to be increased that much and your flat line at the current level for 15 years is two trillion dollars of aid over the next 15 years. It’s a big issue about how that gets spent and then multiplied by domestic resources. It’s a six to ten trillion dollar summit – it should be taken fairly seriously in terms of the framework and policy, and no one’s thinking about it properly like that.


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Written by African Business Magazine

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