An ODI study reveals that Africans are losing $1.8 billion a year due to high fees levied on funds sent from abroad by relatives. The report found that African faces some of the highest charges in the world for international transfers and claims that reducing African charges to the global average would generate enough revenue "to put some 14 million children into school, almost half of the out-of-school total in the region, and provide safe water to 21 million people". In a context where global remittance charges are meant to be cut by 5% by 2014, the think-thank urges governments to increase competition in money transfer remittances and to establish greater transparency on how fees are set by all market operators.
DFI (with Eurodad and Development Initiatives) produced a report for the European Parliament on “Financing for Development post-2015: Improving the Contribution of Private Finance”. The report underlines that official finance remains more important for low-income and vulnerable countries, due to large private finance outflows. Public finance is also more predictable, counter-cyclical and targetable at development goals. It catalogues major problems in using official finance to leverage private finance, including lack of additionality, transparency and ownership by governments and citizens, and poor evidence of development impact. It recommends that the EU focus instead on investing public finance in public services which promote investment (education, health and infrastructure), on changing policies such as investment and trade treaties which encourage tax evasion, and on supporting fair debt workout procedures and responsible private financing standards to maximise development impact. More information is available in this blogpost by Development Initiatives.
DFI moderated a panel on lessons from the experience of a health sector PPP in Lesotho, based on a study from Oxfam. Experts from Oxfam, the Lesotho Consumer Protection Association and IFC exchanged views, agreeing that PPPs are a high cost and high risk option for financing, best used in conditions where private sector expertise is worth the extra cost, and that it would be desirable to review the Lesotho contract. To read the Oxfam report, click here.
DFI provided technical support for the OIF Ministerial and Technical Meetings of the Finance Minister’s network on financing for development. The Ministerial Meeting focussed on discussion with the OECD of current plans to track “Total Official Development Support” and to change definitions of ODA concessionality and content. Ministers urged that aid should continue to flow to LDCs, LICs and LMICs with high levels of poverty and other needs, and that any definitions should encourage continued aid flows and be coherent with recent IMF concessionality definitions. They agreed to make further inputs to the OECD at technical and ministerial levels over the next six months. The technical meeting discussed current findings and next steps in a comprehensive study of how to increase tax revenue in Francophone LICs, with a particular emphasis on progressivity and reducing global tax evasion.
DFI presented in a seminar at New Rules for Global Finance on how the G20, FSB, IMF, World Bank and tax governance institutions currently assess their impact. The seminar was well-attended by senior officials from the institutions, and conducted a comprehensive review of the institutions’ impact assessment methods, which will feed into an improved impact assessment methodology for the 2014 Global Financial Governance and Impact Report (GFGIR). To read the 2013 GFGIR, click here.
On 10th March 2014, the Cameroonian capital Yaoundé hosted a regional conference to discuss ways to leverage resources to finance infrastructure projects. The event gathered senior policymakers from the Economic Community of Central African States (ECCAS), academia and private sector representatives, as well as experts from international institutions who reviewed types of financing available for infrastructure projects such as loans or PPPs. Details of this event organized by the IMF and Cameroon – agenda, presentations, speakers’ list – are available here, among which this presentation by the IMF’s Fiscal Affairs Department entitled Managing Fiscal Risks from Public-Private Partnerships.
In recognition of the 5th anniversary of the G20 London Summit, the Overseas Development Institute, in cooperation with Development Finance International and New Rules for Global Finance, is hosting a public discussion on “Is Global Governance Fit for Purpose?” on Tuesday 1st April. The event will launch the Global Financial Governance and Impact Report published by New Rules in collaboration with ten additional organisations. This report assesses how well the G20, IMF, World Bank, FSB and global tax system are governed, and whether they are having the desired positive impact: have they achieved their goal and made global financial governance fit for purpose, so that it is having a positive impact on the world’s citizens? Find registration and more information about the event here.
Education related country budget and expenditure data contained in the joint DFI/Oxfam 2013 Report and the GSW database contributed to the work of analysis for the latest installment of the Education For All Global Monitoring Report published by UNESCO. The 2013/2014 report provides an update on the six Education For All goals, presents evidence that progress in education is vital for achieving post-2015 development goals and highlights the importance of strong policies to unlock the potential of teachers to help them face the global learning crisis. A summary of the UNESCO report is also available here as well as other related information.
Christian Aid and Tax Justice Network Africa have released “Africa Rising? Inequalities and the essential role of fair taxation”, a report which explores the link between tax policy and inequality. Focusing on 8 African countries (Kenya, Ghana, Sierra Leone, Nigeria, Zambia, Malawi, Zimbabwe and South Africa), the report reveals that despite a robust growth rate and some positive progress in essential services such as health and education in recent years, income inequality in sub-Saharan Africa is set to worsen without a strong set of tax policy reforms at national and global level. To address this issue, the paper makes four recommendations: (i) at a national level, sub-Saharan African Governments should focus on raising tax revenues; (ii) a pan-African coordination of tax policies among sub-Saharan Governments and enhanced regional cooperation and information sharing; (iii) global reforms where the international community tackles financial secrecy and tax havens; and (iv) optimise the opportunity of the new post-2015 framework replacing the MDGs by ensuring that fairer taxation is at the core of the new forthcoming system of targets and indicators.
The 12th Plenary Session of the Leading Group on innovative financing for development took place on January 17th in Abuja under the Nigerian presidency. Among the various issues discussed, the day-long plenary event clarified the categorisation of existing initiatives of innovative financing and discussed the state of the international mobilisation in favour of solidarity taxes. It also started a debate on initiatives of innovative financing for climate change. Finally, it was announced that a workshop of international experts aiming to follow up on the various issues discussed in Abuja is planned for the Spring 2014 in Paris. The agenda, event summary, keynote speeches and related documentation are all available on the Leading Group website.
Experts from the private sector, academia, NGOs, UN agencies and government gathered in November 2013 for a consultation meeting in preparation for the 2014 installment of the Africa Progress Report. A central question underpinned the meeting: what kind of development finance does Africa need to build a sustained and inclusive growth? The consultation panel discussed a variety of topics: transforming agriculture and fisheries; developing infrastructure; mobilising investment; improving taxation; and better use of aid. A summary publication details the framework of the discussion and provides some background papers.