Target Audience: Public This project basically focuses on finance for development as an approach to achieve sustainable development goals which were adopted to increase the efforts on reaching the millennium development goals.

1. Financing for development is an approach that was adopted to increase the focus of efforts of countries development
institutions and NGOs on reaching the Millennium Development Goals(MDGs) which were a focal point for
government to develop policies and overseas aid programs designed to end poverty and improve the lives of the
poor people. However the eight MDGs failed to consider the root causes of poverty and overlooked gender
inequality as well as the holistic nature of development hence was considered to be narrow.
The Sustainable Development Goals on the other hand are a set of new universal goals, targets and indicators that
will be operated over the next 15years. The new global development agenda of replacing the MDGs as of 2016 by
the SDGs is with the major aim of ending poverty and inequality.

2. It is vital to remember that the MDGs focused on social and economic goals only that they targeted developing
countries whereas the SDGs target both developed and developing countries and this is easier to realize because it’s
a collective effort. In addition, the 17 goals also include targets on women’s empowerment, good governance, peace
and security which are generally issues that affect the world over.
The biggest query however is how the SDGs will be funded? The “Trillion-dollar question:”
The nature of Financing for development is a challenge that development partners are trying to address globally and
the fact that there are resources available globally to finance development but they are not being utilized, mobilized

3. or channeled for development i.e. not all available public and private resources will automatically be allocated and
used effectively to support the SDGs.
However, there are a number of players who have influenced the financing for development framework for the
SDGs which include institutional investors such as pension funds, sovereign wealth funds, mutual funds and
insurance companies have all emerged as potential sources of finance because of their growing assets under
management and their ability to provide long term finance.
The flow of financial resources to developing countries and multilateral organizations
USD million
2002-2003 2010 2011 2012 2013
2002-
2003
NET DISBURSEMENTS
I. Official Development Assistance (ODA) (A + B) 1 104 3 826 4 983 5 403 4 846 512
ODA as % of GNI 0.25 0.32 0.34 0.36 0.33 0.23
A. Bilateral Official Development Assistance 874 3 241 4 309 4 550 4 165 296
of which: General budget support 7 81 - 11 6 -
Core support to national NGOs 1 92 142 29 144 1
Investment projects 52 87 1 580 327 232 - 9
Administrative costs 50 162 302 335 322 24
Other in-donor expenditures (a) 19 9 3 157 345 36
of which: Refugees in donor countries 18 6 - 154 343 31
B. Contributions to Multilateral Institutions 230 585 674 852 680 216
of which: UN 56 163 165 299 176 20
EU - - - - - 133
IDA 80 156 170 146 110 34
Regional Development Banks 61 94 85 103 112 18
II. Other Official Flows (OOF) net (C + D) - 21 266 262 330 467 4
C. Bilateral Other Official Flows (1 + 2) - 21 266 262 327 464 4
1. Official export credits (b) - 100 55
2. Equities and other bilateral assets 79 266 262 327 464 - 51
D. Multilateral Institutions - - - 3 4 -
III. Grants by Private Voluntary Agencies 292 928 1 373 1 433 - 64
IV. Private Flows at Market Terms (long-term) (1 to 4) 470 9 511
11
904
14
740
17
858 1 096
1. Direct investment 68 4 444 4 219 8 647 4 959 919
2. Private export credits - - - 204 4 416 177
3. Bilateral portfolio investment 402 5 066 7 685 5 889 8 482 -
4. Securities of multilateral agencies - - - - - -
V. Total Resource Flows (long-term) (I to IV) 1 845
14
531
18
522
21
906
23
170 1 677
Total Resource Flows as a % of GNI 0.42 1.23 1.28 1.46 1.58 0.74
For reference:
DISBURSEMENTS
Official Development Assistance, total gross (c) 1 104 3 826 4 983 5 515 4 924 535
Bilateral grants, total 874 3 209 4 247 4 620 4 224 318
Bilateral loans, total gross - 33 62 43 20 1
Bilateral loans, amounts received - - - - 112 - 79 - 23

4. Other Official Flows, total gross 83 274 262 330 467 159
of which: Official export credits 4 - 159
COMMITMENTS
Official Development Assistance, total (c) 1 084 3 826 4 983 5 515 4 846 568
Bilateral grants, total 896 3 209 4 247 4 620 4 145 336
Bilateral loans, total 33 62 43 20 -
Memo items:
Gross ODA debt relief grants 6 8 13 12 11 104
of which: debt forgiveness 5 8 13 4 2 104
Net ODA debt relief grants (d) 6 8 13 8 - 102
a) Covers development awareness and refugees in donor countries.
b) Including funds in support of private export credits.
c) Including debt relief.
d) Comprises bilateral grants for forgiveness of ODA, Other Official Flows (OOF) or private claims; other action on debt such as deb
Buybacks or service payments to third parties; net of offsetting entries for the cancellation of any ODA principal involved.
Emerging economies therefore have become important engines of global economic growth and risen as new donors
whereas the focus of debate about development financing has broadened fromthe quantity of aid to its quality.
Financing the SDGs will require all resources to be mobilized efficiently and official aid provider or private sector
to mobilize all resources and spend there effectively only at that will the desired development outcomes be achieved.
Therefore there is a grave need for improved domestic resource mobilization through better tax administration,
greater capacity to negotiate and manage natural resource contracts and stronger mechanism for limiting capital
flight and illicit financial flows.
This is because domestic resource mobilization is the larges pool of resources available to developing countries i.e.
domestic resources constitute the largest pool of funds available largely through taxes, duties and natural resource
concessions. A country’s ability to mobilize domestic resources and spend themeffectively at the national level lies
at the essential point of financing for development.
Effective domestic public policy helps increase equity like gender through poverty eradication, providing public
goods and services while rein-enforcing a country’s ownership of public policies reduces aid dependency.
The trend of tax revenues on the African continent is positive, with the average tax revenue as a share of GDP
increasing since the early 1990s. The tax ratio is the total of all collected taxes expressed as share of gross
domestic product (GDP). Collected taxes across the continent increased from 22 percent of GDP in 1990 to 27
percent in 2007, implying that many economies have made noticeable progress in collecting taxes. This ratio is
important because it tells how much taxrevenue is available to a country’s government, taking account of the size of
the economy.

5. Therefore developing countries through domestic resource mobilization as seen in the graph above have the capacity
to finance SDGs and development as a whole. African governments in particular should set ambitious, nationally
defined revenue targets, and halve their revenue gap towards this target by 2020, through strengthened tax
administrations implementing fair tax policies and curbing serious revenue losses due to corruption and illicit flows .
Therefore governments should strengthen domestic resource mobilization and public expenditures to generate and
deploy resources for promoting economic development, reducing poverty, and improving equity in order to enhance
country ownership and public accountability of public policies. The way forward is to strengthen the domestic
resource mobilization so as to focus on stronger administrations, simpler revenue systems and collective action to
address international tax issues, evasion and avoidance among others.