Development Account Projects
Developing local capacities in Africa for the identification of growth opportunities through resource mobilization
Background:
Recent estimates suggest that growth rates need to be doubled to about 7 to 8 per cent per annum and sustained for about a decade if Africa is to meet the Millennium Development Goals (with specific reference to Goal 1, on poverty reduction). This calls for policies that recognize the roles of market-based incentives in stimulating growth, enhancing the efficiency of the State through institution-building and human resource development and raising national productivity and competitiveness and thereby the overall growth prospects of African economies. Rising average incomes should lead to increases in domestic savings, which should help to gradually reduce dependence on external concessionary aid flows. Sustained growth and an improved enabling environment would also make these economies more attractive to external private capital investment, which, together with higher levels of domestic savings, should eventually replace official development financing in the long term.
The Monterrey Consensus and the New Partnership for Africa’s Development both stress increased domestic resource mobilization and the attraction of international flows as part of the means to attain the internationally agreed development goals, including those contained in the Millennium Declaration. The project will cover the experiences of eight countries to identify country differences in terms of their capacities to mobilize domestic savings and external resources and derive lessons learned for adoption by other, less developed countries in the Africa region. The project will be executed by UNCTAD in cooperation with ECA.
Objective:
To strengthen the capacity of African countries to identify and utilize non-debt-generating domestic and foreign resources for the achievement of the Millennium Development Goals.
Expected accomplishments:
- Improved national capacities (banking and non-banking) and financial intermediation to establish new mechanisms for domestic resource mobilization and investment
- Mechanisms developed for increasing capital flows from traditional and alternative (non-debt-creating) sources to close the domestic financing gap
- A definitive policy and strategy devised to accelerate growth through external and domestic resource mobilization, including the incorporation of resource mobilization initiatives into the Poverty Reduction Strategy Papers to support efforts to achieve the Millennium Development Goals
Implementation status:
Implementation of project activities started in August 2006 when Geneva Missions of the case study countries were contacted to confirm their participation in the project. Collaboration with the ECA has also started and consultations with the NEPAD Secretariat are underway. An international consultant has been recruited to prepare the Concept Paper, "Mobilizing non-debt generating foreign and domestic resources for achieving the MDGs in Africa", while three other international consultants have been selected and invited for the Expert Group Meeting now scheduled for 16 February 2007. The selection of participants for this Meeting has been completed for 6 of the 8 country case studies, and five local consultants have been selected to prepare country case studies.
