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Financing the Future starts with Financing for Development

Financing the Future starts with Financing for Development

In a few weeks’ time, governments will meet in Addis Ababa for the third Financing For Development (FFD) Summit. There, representatives from every country will thrash out how the next chapter in global development – the Global Goals (also known as the Sustainable Development Goals, the SDGs) – will be funded.  

Today (June 19) is the last day of negotiations in New York. As the text of the final agreement is revised and reviewed, it is essential that ambassadors in New York – as well as leaders and ministers meeting in Addis in July – deliver three specific outcomes focused on the poorest people, particularly girls and women.

First, FFD delegates, ministers and leaders should include in the agreement a commitment to spend 50% of all Official Development Assistance (ODA) on the least developed countries (LDCs). If implemented last year, this move would have provided an additional $26.5 billion in 2014. This must be part of a broader commitment to increase aid and meet the target of investing 0.7% of national income (GNI) in aid as soon as possible for all donor countries. An increasing proportion of people living in extreme poverty – on less than $1.25 a day – live in LDCs, and most of these are in Sub-Saharan Africa. In addition, women living in LDCs are much worse off than those living in other developing countries. Assistance to the poorest countries has slumped in recent years, and donors need to adopt 50% as a yardstick by which to measure themselves: right now only one third of the world’s aid goes to its poorest countries. In a word, this is unacceptable.   

Second, governments should agree to a basic social compact so that, in principle, the poorest people in the poorest countries can access essential services like education and healthcare. If Addis were to set a target for funding of $500 (PPP) per person per year or 10% of GNI (whichever is higher) to fund such basic social services it could provide a real boost for the world’s poorest countries, have a major impact on extreme poverty and help secure everyone’s future. Such increases in funding for LDCs would provide vital investments in nutrition, education, maternal and child health and other social sectors that will make up the basic social compact. 

Third, the FFD process must deliver policies that can unlock the domestic resources of LDCs – the major way countries will develop in coming years. Every country – developed and developing – can clamp down on corruption and illicit financial flows. The global community must bring in full transparency for financial information, extractives payments, country by country reporting and fully involve developing countries in international tax discussions. Supporting countries to raise and use their own revenues and money for maximum impact is vital. Increasing the ability of the public, civil society and others to ‘follow the money’, would be an invaluable boost for countries’ efforts to work themselves out of poverty and help create a race to the top. Underpinning these essentials is the need for a data revolution: investments in mapping poverty and the information and technology that will enable us to deliver from resources to results. 

The real definer of success in Addis will be how far countries deliver for those that are most impacted by poverty, girls and women.  As a girl, you are more likely to be denied an education than a boy; you do not have the same rights to credit or land as a man and you are likely to be paid 10-30% less than a male counterpart. Poverty is Sexist, but if we empower girls and women as an urgent priority, everyone will be lifted out of poverty more quickly. The employment rate between men and women by 2017 could generate an additional $1.6 trillion in global output (measured in purchasing power parity).

If Financing For Development is to truly deliver and work for everyone, it has a clear objective: put the poorest first. This is a moment where leaders will have the future in their hands. It’s up to them to realise it.

Eloise Todd is the Global Policy Director of The ONE Campaign

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Written by African Business Magazine

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