AfDB Advocates Strong, Sustained and Shared Growth in Africa
Africa: Gains on Anti-poverty Goals Associated with Bold and Innovative Policies
Africa has made steady progress on the Millennium Development Goals (MDGs), according to a report launched today by the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP). Read More
The African Development Bank (AfDB) President, Donald Kaberuka, has been invited to co-chair the round-table to be held on the theme: “Domestic resource mobilization: achieving development and the MDG’s in a sustainable way” with Andris Piebalgs, European Commissioner for Development and Humanitarian Aid. The round-table is organized by the European Commission as a side event to the high level plenary meeting on the MDGs in New York on 20 September 2010. During the event, speakers will underscore the crucial role of domestic revenues in efforts at reaching the Millennium Development Goals in a sustainable way.
Mr. Kaberuka will advocate that to accelerate progress towards the MDGs in Africa, the starting point and overriding goal should be to stimulate growth that is strong, sustained and shared. This might be achieved by building and harnessing the capacity of African economies, notably by promoting a vibrant sector, key to diversification and employment creation. The AfDB strategy is therefore tailored to help its regional member countries achieve strong, sustained and shared growth in order to reach the MDGs and in the process, generate higher domestic resources. By investing in infrastructure, the Bank helps the countries to unlock their production potential by alleviating supply constraints, lowering production costs and linking producers to markets.
In 2009 alone, the Bank disbursed around USD 6 billion to finance infrastructure projects in Africa. A lot more funds are needed – around USD 75.5 billion a year, according to a study by the Infrastructure Consortium for Africa – to fill the infrastructure gap. The Bank’s private sector strategy is key to creating jobs and building a resilient economy, while the higher education and technology strategies will enable African economies to compete in this high-technology integrated world with strong human resources. Governance support has been strategic to unlocking the potential of the private sector and competitiveness. To enable market expansion, which broadens the revenue base, the AfDB has been investing in regional integration.
The AfDB strongly believes that economic growth is crucial for progress on MDGs to be made. It is also critical that Africa develops its domestic resource base to reduce reliance on aid and external capital inflows. The global economic and financial crisis contributed to the reduction in investment flows to the continent and, a decline in demand for exports, putting severe strains on the budget of several countries. Strengthening tax and non-tax revenues helps to create additional fiscal space, fund essential infrastructure investments and social services. It provides greater economic independence and reinforces accountable taxation and public expenditure systems.
The AfDB provides support to its regional member countries for them to reform their tax systems in order to mobilize domestic resources that can be invested in infrastructure and social development. There is still a long way to go, but the client countries are in the right direction.
The event will be attended by representatives of OECD, UNDP, AUC, the World Bank, the IMF, the ACP secretariat, bilateral and multilateral donors, civil society organizations, the private sector, among others.