The Executive Secretary of the UN Economic Commission for Africa, Mr. Carlos Lopes has stressed the need to scale up both domestic and private external financial resources for Africa’s structural transformation.

He made the remark at the opening of the Regional Outreach of the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF) to the Africa Region; a two day event which commenced today in Addis Ababa. The meeting is mandated among other goals, to produce a report proposing options on an effective sustainable development financing strategy.

Speaking to the committee of experts on the importance of current sustainable development challenges within the continent and the critical aspect of mobilizing resources to address these challenges, he stressed the need to be “creative and innovative to ensure that first and foremost it is domestic sources of financing that underpin Africa’s structural transformation.”

Mr. Lopes said that contrary to perceptions Africa does not have the largest concentration of poor people in the world and also fairs well on the MDGs, “if only we measured efforts and not universal lines”.

He reasoned that these perceptions need to be corrected not to make the case for less development financing, but rather how it is used. “In order to contemplate new forms of engagement one needs also to consider new forms of mobilizing resources” he said.

The Executive Secretary recalled the Rio +20 Conference on Sustainable Development (Rio+20) which delegated the objectives of the ICESDF, and stated that Africa realized then that it could not simply be a spectator and that it needed to take ownership of its own narrative to ensure that continental realities and priorities are taken into account going forward. He noted Africa’s consistency in fulfilling this goal since then saying, “It is the only region, so far, that has done such a groundbreaking political work, stating its hopes, and strategizing on its options.”

In the same vein, the Executive Secretary proposed a five pronged approach that would contribute towards meeting these financial objectives for the sustainable development agenda. These are mainly:

1. To actively harness Africa’s clear leverage to increase traditional tax revenues. Currently, traditional taxation in many African countries is still too far below the threshold of 15% of GDP. He said it is important for the continent to stop granting tax incentives on the pretext of attracting Foreign Direct Investments as the reality is that such practices have resulted in revenue losses, which in the case of just four East African countries have been estimated at US$ 2.8 billion a year.

2. The imperative need to increase the use of non-traditional financing instruments. Mr. Lopes stated that there is the need to explore and leverage instruments such as: Sovereign Wealth Funds, Private Equity Funds, Pension Funds, Insurance and Bonds.

3. Africa needs to optimize the US$ 60 billion savings made by over 140 million Africans in the Diaspora. “By bringing this cost down to about 5 percent, the continent could save up to US$4 billion a year.”

4. The need to better engage the private sector in public service delivery and infrastructure development. Moreover, targeted public and private sector investments also need to foster green growth.

5. The crucial importance of resolving phenomenon of Illicit Financial Flows. “Most of you will not know that since 2000, Africa has lost over US$50 billion annually through illicit outflow of funds.” This amount equates to Official Development Assistance (ODA) received from donor countries over the same period.

Also highlighting the crucial timeliness of this meeting of experts, the Co-chair of the ICESDF, Mr. Mansur Muhtar said that Africa’s work towards achieving Sustainable Development Goals (SDGs) is also an important means of strengthening ownership and a broader process of elaborating its development agenda.