A roundtable of seasoned development experts took into discussion Africa’s current state of development at the 9th African Development Forum of the United Nations Economic Commission for Africa (UNECA) in Morocco recently; their consensus was that Africa can potentially generate some $200 billion for sustainable development investment but only if moves to improve the climate for investment and trade while plugging illegal financial leakages.
“Africa is not poor financially but it needs to get its house in order. For too long we have allowed the narrative of Africa to be one about raw materials and natural resources coming out of Africa, yet Africa can take advantage of its own comparative advantages, including these natural resources, and become the leader in the value chains that require these raw materials,” Mr Stephen Karingi, Director of Regional Integration, Infrastructure and Trade at the ECA was quoted as saying after the roundtable.
The issue of illicit financial outflows and leakages may have been severly understated and overlooked in times past. The ECA asserts that Africa has lost $50 billion every year in the last decade to such leakages; this is almost the same amount of money it has received in terms of official development assistance. If this is really the case, Africa can be its own financial powerhouse if it successfully plugs in all the leakages.
Africa, undoubtedly shows great promise, and this continues to be validated by international authorities. For instance, the World Bank says that, of the 50 economies that improved in their regulatory business environment in 2013, 17 are from Africa and many of these countries rank ahead of China, Brazil and Russia.
While this is significant news, the onus is still on the emerging continent to leverage its enormous potential and unlock its financial resources by a combination of private equity investment, remittances, domestic resource mobilization and, of course, tying all financial loose ends.
Adama Elhiraika, Head of Macroeconomic Policy at the ECA, speaking on the same topic commented; “We need to get our policies right and allow for the kind of investments that people can make in Switzerland. Given the size of Africa, there is need to promote free movement of capital, which is as important as the free movement of goods and services in boosting trade and investment.”
The African Development Forum aims to establish connections between the importance of mainstreaming resource mobilization and the reduction of trade barriers into economic, institutional and policy frameworks, and scaling up in pursuit of the post-2015 continental development goals. This year’s edition focused exclusively, for the first time, on the continent’s development with discussions bordering around promoting Africa’s capacity to delve into innovative financing mechanisms that will result in transformative development on the continent.
By Emmanuel Iruobe