R/€ = 13.08
R/$ = 11.60
Au 1283.00 $/oz
Pt 1255.50 $/oz
Sep 26, 2007
Africa must mobilise 'hidden' domestic resources for development - UNBack
Johannesburg|Africa|Resources|Systems|Africa|Gabon|Building|Development Finance|Formal Banking Systems|Public Finance Reforms|Systems|United Nations|Uctad|Unctad
© Reuse this African countries should become less reliant on overseas donor funding and move towards increased domestic resources to accelerate the continent’s economic growth, a United Nations (UN) agency said on Wednesday.
The UN Conference on Trade and Development (Unctad) head of the Special Coordinator in Africa Sam Gayi said at the launch of the ‘Economic Development in Africa’ report, in Johannesburg, that Africa could “claim ownership” of its development, if it had relied more on domestic financial resources.
Africa had potential financial sources that could, over time, significantly reduce the continent’s dependence on aid, and enable the countries to use the finances to fund their own priorities, rather than those of the overseas donors.
While some public finance reforms had been implemented to increase government revenue, the effect on State revenues had been limited.
Gayi suggested that countries needed to step up their efforts to boost local financial resources, and focus efforts on increased tax revenues, mobilising workers’ remittances, reforming the financial sector and tackle capital flights.
Many African countries have introduced value-added taxes, which raised government revenue to a limited extent without compensating for the revenue losses as a result of the reduction of trade taxes. But should countries improve their collection, revenues accrued from taxes could double in some countries.
Formalising the informal sector could also further boost tax revenues, which could be invested to sustain higher rates of economic growth.
Unctad stated that workers’ remittances were an important source of development finance, and that channelling more remittances through African countries’ formal banking systems could increase their development impact.
“Most remittances now spur consumption, but governments could encourage their greater use for investment,” the report suggested.
Capital flight also continued to deny African economies of large amounts of the continent’s resources for investment, and the agency urged Africa to stop the “financial haemorrhage”.
‘Developmental states’ to boost savings
Unctad also called for the establishment of what it described as a ‘developmental state’ to accelerate economic growth.
Developmental States had a much greater intention of increasing and retaining domestic financial resources, and had resulted in phenomenal growth for several Asian economies.
Developmental States have also underpinned the immediate post-colonial development of several African countries, and this could re-emerge in Africa, Gayi said.
Gabon, a West Central African country, was the one of the world’s fastest growing developing countries up to 1975.
Developmental States would enable African governments to use domestic resources and allow them to encourage long-term productive investment.
But, for developmental states to be successful, countries had to reduce their dependency on external funding, and deepen current improvements in governance, Gayi said.
A successful developmental State was one that creates institutions that genuinely address development challenges, but the report warned that there was “no magic formula”.
“Building such institutions is a learning-by-doing process, adjustable and flexible enough to allow even for the possibility of failure. True ownership means allowing sufficient policy space to undertake such a learning process, leading to robust institutions to push development forward,” Uctad stated.
Edited by: Liezel Hill© Reuse this Comment Guidelines (150 word limit)
Updated 12 minutes ago US energy firm Chevron will shut down its 100 000 bl/d South African oil refinery in Cape Town from February 13 to March 31 for routine maintenance and safety inspections, the company said on Friday. "Chevron has made contingency plans to mitigate potential...
Updated 36 minutes ago Days of rolling blackouts this week have blighted South African society and business, and they face an increasing number of outages in years to come. But the alternative, a grid collapse, could be catastrophic. Bordered by tiny, war-scarred or impoverished states...
Updated 1 hour 26 minutes ago Petrochemicals giant Sasol, which typically incinerates its waste sludge streams or sends them to hazardous waste sites, is increasing its use of composting to treat these streams at its Secunda plant, in Mpumalanga, reducing transportation and disposal costs, as...
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
The international Square Kilometre Array (SKA) radio telescope – which is to be jointly hosted by South Africa and Australia with, later, outstations in other countries – may not yet exist, but international scientific working groups are already deciding what...
A free Web-based solar power plant capacity-planning tool offers project planners and developers, as well as governments, a means to assess the solar energy potential of thin-film solar PV power over an area of land. The tool was developed by thin-film solar...
As yet, no specific methodology, timeline or costs have been finalised to remedy the water ingress, excessive to contractual specifications, into the Gautrain tunnel between emergency shaft two (E2) and Park Station, says Bombela Concession Company technical and...
The “seriously disruptive” electricity outages in South Africa have cost packaging group Astrapak more than R2-million in “irrecoverable downtime costs”, the company said on Monday, adding that the power cuts were negating some of the benefit of energy saving...
Bakkies and more affordable cars dominated South Africa’s new vehicle market in 2014. Unaudited data from the Department of Trade and Industry (DTI) shows that South Africa’s most popular vehicle in 2014 was the Toyota Hilux, selling 37 562 units.