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Ethiopia: Better Days for Development Finance

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The year 2015 will be a key milestone in the global effort to address critical financial issues pertaining to global development. With the Millennium Development Goals (MDGs) set to expire at the end of 2015, the United Nations is developing Sustainable Development Goals (SDGs) which constitute 17 goals and 169 targets.

The Third Financing for Development (FoD) Conference to be held from July 13 to 16, 2015, in Addis Abeba will be followed in September by the UN Summit in New York for the adoption of the post-2015 development agenda to succeed the MDGs and in December by the 21 UN Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP) in Paris. The outcome of the Addis conference, which will be negotiated and agreed upon by member states, is expected to be significant commitment to implementation of the post-2015 development agenda on sustainable development.

The conference aims to produce an intergovernmental agreement on the future of development and how to finance it. More than ever before, it will be crucial to agree on the means to ensure that the systems of finance, trade and development support the aspirations of the new, ambitious post-2015 agenda, the sustainable development goals, and binding agreements to tackle climate change.

The conference, which will be hosted at the headquarters of the United Nations Economic Commission for Africa (UNECA), is set to address demands related the eradication of poverty and hunger, achieve equitable and sustained economic growth and sustainable development, protect the environment and promote peaceful and inclusive societies where no one is left behind. It will devise ways and means of ensuring gender equality and promoting and protecting all human rights, including ‘the right to development’. A major aspect of the agenda will be discussion on progress made in the implementation of the previous financing for development conferences (Monterrey Consensus in 2002 and Doha in 2008), addressing new and emerging issues and reinvigorating and strengthening the financing for development follow-up process.

The Addis conference comes at crucial time in the quest for a transformative development agenda and a breakthrough on the question of financing for development to meet new obligations. Hence, the conference will be decisive in ways that governments will negotiate, under the UN framework, an important political agreement for financing, supporting, and enabling a strategy for accomplishing the new sustainable development agenda.

Hopes are high that the conference will be able to deliver this agreement on how finance will set the world’s ambition for the two crucial and closely interrelated meetings in New York and Paris.

For developing countries, solutions to the challenges of financing development will have to come before any meaningful agreement on a new set of sustainable development goals (SDGs) can be reached. Hence, the Addis conference will be held based on the fact that it is not possible to establish new development agendas without first analysing the systemic obstacles related to the lack of implementation of the existing agreements.

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Without adequate resources and means of financing, the new international obligations stipulated in the draft SDGs will be wishful thinking and challenging homework for developing countries. It is within this framework that the Heads of State and Government and High Representatives will gather in order to address the challenges of financing sustainable development in the spirit of global partnership and solidarity.

The Conference will be of special interest to African countries as they face huge challenges in mobilising sufficient financing for their economic development. The outcome of the conference will have important implications for Africa in that: it will inform the means of implementation of SDGs and will determine the extent to which the aspirations of the African Union’s (AU) Agenda 2063 and the African Common Position can be realised. It will have huge significance for the continent in generating finance to fight abject poverty.

Given the fact that successful development requires ownership and leadership from developing countries, African governments should stand as the main drivers of their own development, while recognising the need for external sources of finance. It is worth emphasising that one of the mechanisms that would enable developing countries to address the challenges they face in mobilising financing for their economic development is domestic resource mobilisation (DRM).

Both the Common African Position and Agenda 2063 outline Africa’s development priorities in the next decades. They also prioritise DRM as the main source of financing for structural transformation and sustainable development in Africa. A salient issue that should be raised for African countries is whether reliance on domestic resources could fill significant development financing gaps given the barriers that they face in terms of good governance, peace and political will of their leaders.

Africa, a continent mostly portrayed as the last growth pole, is witnessing unprecedented economic growth and paving the way in registering development. The Addis conference will give Africa and its development partners the opportunity to reflect on the achievements made and the gaps in various sectors.

Despite the fact that African countries are showing progress in socio-economic and political aspects, before firming up to the implementation of development agendas they need to reassess issues related to political governance. The problem of governance hinders development and corruption is the major bottleneck to effective resource mobilisation and allocation that are vital for poverty eradication and sustainable development.

In order for the realisation of transformative and ambitious development agendas, African governments should strive to strengthen their institutions and develop a culture of democracy. It is only when African governments can create a gun-free continent wherein peace and security prevail over conflict-driven states that a full realisation of genuine development will be achieved. It is imperative to note that the search for such inclusive sustainable development necessitates much political decisions, commitment and leadership to sustain the achievements which are already in progress.

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