AS THE 6th session on sustainable development is drawing to an end, experts have revealed that Africa needs to close a funding gap of up to US$3 trillion in order to achieve Sustainable Development Goals (SDGs) by 2030 and push agenda 2063.
Speaking during a session on financing SDGs using new and digital technologies, African Forum and Network on Debt and Development (Afrodad) senior policy analyst Tirivangani Mutazu said Africa is currently sitting on a funding gap of US$3 trillion which poses a threat to the achievement of SDGs by 2030 as well as Agenda 2063.
“Achieving the SDGs and agenda 2063 will require mobilisation of resources and massive financing and that is the most important aspect that we need to look at.
“Currently, African countries have a US$3 trillion annual investment gap in key financial development sectors. What this means is that for the agenda 2030 and 2063 there is a funding gap of US$3 trillion. The biggest question we should be able to answer is where is that money going to come from?” Mutazu asked.
He added that African countries are losing billions of dollars due to corruption and illicit financial flows, money which could be covering the existing funding gap.
“Africa is currently losing US$100 billion to corruption and US$50 billion through illicit financial flows in its various forms which are tax evasion, tax planning, profit shifting and debt servicing. This is money which could be used to close the funding gap for the SDGs and agenda 2063.
“For us to realise the SDGs and Agenda 2063, there is need for us to end corruption, illicit financial flows and to explore tax and non-tax sources, royalties, licences and levies for revenue generation,” Mutazo said.
He particularly emphasised the need for governments to prioritise debt servicing in order to achieve sustainable development.
“There is a threat from the debt side which can derail the achievement of SDGs or even reverse achievements made towards the goals in many countries. Some countries have managed to use debt very well and it has contributed much to the realisation of the SDGs and agenda 2063.
“However, there are countries that are struggling in terms of servicing the debts now. Countries like Zimbabwe, Chad, Mozambique and Sudan are currently in debt distress and if we are to achieve sustainable development, then these countries should prioritise debt settlement,” he said.
Speaking at the same event, University of Nairobi lecturer Layla Latif said apart from servicing debt, African governments should embrace digital technologies to generate revenue and cover the US$3 trillion funding gap.
“Basically, we are saying that we have two agendas — that is agenda 2030 for sustainable development and the agenda 2063 for Africa.
“For agenda 2063, which is more of a long-term goal, the financing model highlights that the money should come from domestic resource mobilisation.
“So, as Africa if we are going to think about resource mobilisation, we need to think about turning the economy into a digital economy because that is where the money is,” Latif said.
The University of Nairobi lecturer added that statistics indicate that close to 10 percent of Africa’s GDP comes from digital transactions.
“This means that the money is there, but it is not being taxed because governments only tax what they can see. Digital technologies hide money thereby prejudicing the government money which could be taxed and used to generate revenue,” Latif said, adding that investing in taxing mechanisms for financial technology (fintech) start-ups will ensure that governments collect revenue which can then be directed to financing SDGs.