UNCTAD urges African governments to find new ways to finance development
It highlighted remittances and public-private partnerships.African Governments should add new revenue sources to finance their development, according to a new report from the United Nations Conference on Trade and Development (UNCTAD).
The institution's Economic Development in Africa Report 2016 estimates that at least $600 billion (€546 billion) will be needed each year to achieve the Sustainable Development Goals in Africa.
However, although Africa’s external debt ratios appear manageable, African governments must take action to prevent rapid debt growth from becoming a crisis, said UNCTAD.
Between 2006 and 2009, the average African country saw its external debt stock grow 7.8 per cent per year, a figure that rose to 10 per cent per year in 2011–2013 to reach $443 billion, or 22 per cent of gross national income by 2013.
But the report argues that African countries should look at other sources of revenue than capital markets, such as remittances, which have been growing rapidly, reaching $63.8 billion to Africa in 2014.
It also highlighted public–private partnerships as effective means to finance development, and called on governments in Africa to tackle illicit financial flows, which can be as high as $50 billion per year.