This is the key message in a 2015 Africa Capacity Report launched Monday in Harare by the African Capacity Building Foundation (ACBF), a non-profit organization that supports capacity building initiatives on the continent.
According to the report, there is need for Africa to mobilize internal resources to implement the post-2015 Sustainable Development Goals and Africa’s economic blueprint, Agenda 2063.
This, however, does not mean that the continent should not mobilize external resources as well.
“African countries should not depend on donor aid alone: most donor countries have failed to live up to the longstanding commitment to deliver 0.7 percent of Gross National Income (GNI),” the report said.
Given the diminishing share of Official Development Assistance to Africa, it was imperative for the continent to aggressively mobilize internal resources to drive growth, the report said.
Other reasons why Africa must mobilize domestic resources to implement its development agenda are that aid-dependent countries tend to be more responsive to donors than domestic priorities while external financial flows could also be unpredictable.
There was also significant untapped domestic resource mobilization potential in Africa as domestic tax revenues mobilized were increasing and remained larger than external financial flows, the report noted.
Tax revenues in Africa, the report noted, reached 507 billion U.S. dollars in 2013 against 442 billion U.S. dollars in 2007.
“Additionally, illicit financial outflows, if curbed, can retain significant resources for development on the continent.”
Launching the report, Zimbabwean Finance Minister Patrick Chinamasa implored African countries to build capacity in domestic resource mobilization to finance the development paths.
“Successful implementation of Africa’s development agenda requires that we rely more and more on internally generated resources,” he said.
ACBF executive secretary Emmanuel Nnadozie said enhancing domestic resource mobilization was not a choice for Africa but a necessity as it cushioned the continent from vulnerabilities associated with outside funding.
“Domestic resource mobilization is a wise way to sustainably finance the development of Africa,” he said.
According to the report, effective mobilization of domestic resources in Africa faced significant constraints that include narrow tax base, high levels of capital flight, evasion and avoidance and proliferation of tax exemptions, lack of legitimacy and capacity by tax authorities as well as lack of public trust in utilization of tax resources. Enditem