UNECA
The African Union Commission (AUC) and United Nations Economic Commission (UNECA) have advocated mobilisation of resources to finance development rather than looking outwards.
The two agencies position was said to have been prompted by high illicit financial outflows from the continent to tax havens and central banks’ reserves in Europe and America.
Specifically, innovative strategies such as tax reforms, unused financial resources like pension funds, capital markets and savings, were identified as critical and could be used for development.
Indeed, the agencies noted that Africa is not poor in terms of resources as its sovereign funds are in excess of $600 billion deriving no gains as the funds continue to sit in banks abroad.
As stated by the AUC and UNECA, raising more domestic resources will increase Africa’s sovereignty, independence, and reduce its susceptibility to external shocks and, most importantly, ensure a more reliable flow of funds for the continent’s transformation agenda.
Indeed, African countries have remained dependent on funds from international finance institutions and developed economies while ignore domestic resources that could serve the same purpose.
A statement obtained by The Guardian at the ninth joint AUC-ECA Conference of Ministers in Addis Ababa, explained that domestic resource mobilization should be the main strategy for ficing Africa’s development in a sustainable manner, considering the amount of funds kept in tax havens and through illicit financial outflows.
Panelists at the conference noted that innovative strategies for domestic resource mobilization, such as tax reforms, unused financial resources like pension funds, capital markets and savings, were critical and could be used for development.
Also, the panelists which included Guinea’s minister of economy and finances, Malado Kaba, Ghana’s Deputy Minister of Finance and Economic Planning, Monah Quartey, Ugandan Minister of State for Finance, Planning and Economic Development, Fred Omach, and the Deputy Chairperson of the African Union Commission, Erastus Mwencha, were of the opinion that promoting intra-Africa tourism, trade, and banking will keep Africa’s resources within the continent and facilitate growth.
Omach deplored the fact that Africa is losing more than $50 billion per annum to illicit financial outflows.
As stated by him, Africa must intensify measures to curb such outflows and deepen engagement with receiving countries in order to repatriate the money, which can be used to finance the continent’s development.
The Ugandan minister suggested that better banking decisions would move Africa forward.
“The central bank reserves of Africa totaling to over $600 billion are kept in banks in Europe and America,” said Omach. “Why can’t the African Union say all these reserves be sent to the Africa Development Bank (ADB), which is triple A rated, and the ADB president be allowed to utilize part of it to fast-track agenda 2063, enabling us to achieve our vision in 25 years instead?”
Omach’s point was reiterated by AUC’s Erastus Mwencha who said, “Africa is not poor in terms of resources. Our sovereign funds are in excess of $600 billion but we derive no gains from those funds sitting in banks abroad.”
Kaba argued that 70 per cent of funding for Africa’s development agendas should be raised internally to ensure sovereignty before looking outside the continent.
Citing the example of her country, Ghana, Monah Quartey said a solid communication plan that persuades and attracts investor confidence in African countries is one of the ways to speed up the continent’s growth.
Guardian