H.E Mr. Erastus Mwencha, Deputy Chairperson of the African Union Commission is challenging African member States to demonstrate commitment in developing financing mechanisms towards the implementation of Agenda 2063 and the United Nations Agenda 2030; the Sustainable development Goals.
Speaking during the “9th Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development”- Round table on Financing, the Deputy Chairperson noted that a harmonized financing of both the Agenda 2063 and the SDGs provides Africa with a unique environment to optimize the opportunities presented by the collective development Africa.
Though cognizant of the challenge of finding a formula for a holistic financing mechanism for sustainable development to realize the ambitions of Agenda 2063 and SDGs, H.E Mr. Mwencha called on Africa to focus on increasing investments to support job creation, food security and industrialization, as the key elements of sustainable development.
The Deputy Chairperson outlined potential mechanisms for financing Africa’s development, emphasizing among other issues; the enhancement of the domestic environment for attracting investments through the development of continental risk mitigation mechanisms such as the African Unions African Trade Insurance Agency and the African Risk Capacity.
The two institutions, he noted, provide assurance against political risks, credit and investment insurance which are key in reducing the cost of doing business in Africa.
In the area of investments, His Excellency highlighted that over the last 15 years, Africa has experienced a steady decline in Foreign Direct Investments however, this can be addressed if Africa was keen on mobilizing domestic Financing by putting in place policies that encourage the flow of the Foreign Direct Investments into industrialization for transformation.
H.E Mr. Mwencha says developing continental capital markets to scale up support for industrialization is key for realization of substantial revenues. This he says should be backed by continental legal and regulatory frameworks for integrated payment systems to reduce transaction costs.
This would be complimented by strong effective regional regulatory bodies, to facilitate the implementation of trans-boundary projects. H.E Mr. Mwencha underscores that this relies heavily on commitments from African governments.
The Deputy Chairperson also called for the establishment of special instruments for financing regional projects, noting that there currently exists no instrument for financing regional projects. The lack of Special Purpose Vehicles, he observed, impedes the implementation of regional projects, beneficial for continental development
Curbing illicit financial flows through which Africa loses about USD 50 billion annually also provides the much sought economic and human development in Africa. H.E Mr. Mwencha stressed the need to work with foreign governments and corporations to track and reduce the illicit financial flows.
Other financing opportunities available for exploration to finance the implementation of Agenda 2063 and the Sustainable development Goals are, tapping into the international instruments and reserves by encouraging sovereign wealth holders such as China, Norway, the Gulf States, Russia and Singapore to invest directly in Africa within a mutually beneficial framework.
Also, mobilizing Remittances for development, which have increased over the past decade to about USD 21 billion to fuel consumption within the social sectors. In this regard, Africa needs to relook and address the cost of remittances and transform the way they are invested to spur entrepreneurship and development.
The implementation of Agenda 2063 development framework, having been drawn largely from the National aspirations of 35 African countries, provides a great opportunity for enhanced alignment of national aspirations to the continental goals. A coherent implementation of the Pan African Agenda with the SDGs therefore calls for commitment by members states to finance harmonized implementation of both frameworks.