Finance for Development Lab’s Post

Insightful policy brief by Development Reimagined highlighting considerations on the opportunity to strengthen Africa's voice in the multilateral system following the African Union's inclusion as a full, permanent member of the Group of 20, to form the G21. They highlight 6 priorities to support the AU's engagement: 1.    Reimagining the IMF Quota System to Provide Fair Representation for The African Continent. 2.    Facilitate SDR Reallocation to the African Development Bank  3.    Support a Reformed Debt Sustainability Analysis – including revisions to the restrictive 60% debt-to-GDP thresholds. 4.    Revise the G21 Common Framework based on African Positions.    5.    Alignment with the AUs Agenda 2063 and Infrastructure Development. 6.    Support capital increase at MDBs, as outlined by the Capital Adequacy Framework report. Will be fascinating to see what Africa's inclusion and representation looks like for the priorities and decisions of the G20 going forward, and how African countries can agree work together towards a harmonised position on priority issues for the continent. https://lnkd.in/emgNqe9G Full brief here: https://lnkd.in/e-UTbMur

After two intensive days at the African Regional FfD4 Consultation hosted by United Nations Economic Commission for Africa and African Union, you'd be interested to know of the game-changing positions that emerged. Here are some snippets from my notes: On #DRM: - We need strategic formalisation that preserves entrepreneurial dynamism while expanding the #tax base - #Digital payment systems must reduce compliance costs while improving revenue collection - Tax #incentives must shift to evidence-based frameworks with mandatory expenditure reporting #Private Sector Financing: - #MDBs must fundamentally reform their operating models to take more risk onto their balance sheets - Project preparation facilities need significant #concessional resources to develop bankable projects at scale - We need to shift from debt to #equity financing through strengthened stock exchanges and venture capital markets Climate Finance: - No more conflation of climate finance with #ODA - these must be separate and additional funding streams (Akina Mama wa Afrika - you will be happy with this!) - #Carbon pricing and border adjustment mechanisms need complete restructuring to reflect #climate justice principles - Called for immediate #suspension of carbon trading until Africa can establish fair value benchmarks for our environmental assets Trade & Development: - African Continental Free Trade Area (AfCFTA) Secretariat implementation must prioritise regional value chains in agro-food, textiles, and chemicals (also on identifying the IFFs streams that can result) - Unilateral measures like #CBAM threaten our #industrialisation - we need multilateral approaches that recognise development levels - Special focus needed on #LDCs' productive capacities - There was also consensus around value addition at source and not just exports of raw materials The radical rethink of #debt sustainability emphasises: - Suspension of International Monetary Fund surcharges - Flexible use of #SDRs for countries in distress - Mandatory private creditor participation in debt treatment - Integration of climate vulnerability in debt sustainability analyses #Technology Transfer & Innovation: - Strategic focus on domestic value addition for critical minerals - Reform of #IP frameworks to address scientific knowledge asymmetries - Substantial recapitalisation of the (UN) Technology Bank Many, many, many themes were discussed, now wait for the report...

Good analysis by Magalie Masamba, PhD on the forthcoming #G20 presidency of #SouthAfrica, the need to reduce debt burdens for countries facing vulnerabilities like climate change, the urgency of comprehensive reforms in the global financial architecture, and the need and to amplify African countries’ voices and decision-making power within these frameworks: “The upcoming South African G20 presidency, combined with the African Union’s newly established permanent seat, represents a strategic opportunity to place Africa’s debt concerns at the forefront of the G20 agenda and advocate for systemic reforms.”

In Day 2 of 2024 African Economic Conference #AEC2024 Joined KEVIN CHIKA URAMA, Chief Economist and Vice-President, African Development Bank Group, Raymond Gilpin, Chief Economist at UNDP Africa, Victor Murinde, Executive Director, African Economic Research Consortium (AERC), and Mavis Owusu-Gyamfi, President and CEO of African Center for Economic Transformation (ACET) to discuss the urgent reforms needed for a just and inclusive global financial system. To support African countries better respond to global shocks: ✅#MDBs must incorporate vulnerability beyond income levels in providing concessional finance, streamline loan application and disbursement, and deploy innovative & derisking instruments to crowd in private sector ✅#IMF’s #SDR and #quota formulas must be reformed so that resources can be directed to countries that really need them ✅ Implement #SDR rechannelling to MDBs and replenish their concessional windows On international tax cooperation: ✅African countries must establish negotiations strategies, build common positions, forge alliances, and strengthen capacities to achieve a successful UN Framework Convention on International #Tax Cooperation On global debt architecture: ✅Overhaul #G20 Common Framework to make it effective, transparent, and time-bound ✅Revamp IMF-World Bank #DSA framework, so it is more solvency focused ✅Diversify sources of funding to reduce cost of borrowing We are at the time with retrenchment of multilateralism, yet the shocks today are far beyond the border of one country. We must work together and advance engagement efforts, for tangible achievements on reform of the global financial architecture. United Nations Economic Commission for Africa United Nations African Union African Union - Economic Development, Trade, Tourism, Industry, Minerals (ETTIM)

Latin America and the Caribbean need more financing to drive sustainable development. 🌍 Join us at the #LACForum to explore how the region can optimise the blend of public and private resources - both domestic and international - to tackle their development challenges. We'll dive into key questions: 🔍 How can LAC countries boost domestic resource mobilisation and channel more international funds towards better development outcomes? 🤝 How can international organisations, development finance institutions and governments work together to ensure international finance meets LAC's needs? Register now to join the discussion 👉 https://lnkd.in/gxh7wMAR Agence Française de Développement | Inter-American Development Bank | #SALC2024 | #Fin4Dev | Anabel González | Thomas Melonio | OECD - OCDE | Ragnheidur Elin Arnadottir

📚 Publication Friedrich-Ebert-Stiftung 💡 How do current patterns of UN financing undermine the foundations of inclusive and effective multilateralism? In this new study titled "Financing the United Nations: Status quo, challenges and reform options", the authors Dr Sebastian Haug (IDOS) and Dr Max-Otto Baumann (IDOS) argue that member states should reform the system of assessed contributions and increase the transparency of voluntary funding. https://lnkd.in/euV7RG6N | #UN #UNFinancing #multilateralism #study United Nations #SummitOfTheFuture

See also my paper which also touches on the same challenges - with the focus on ILO and its social protection agenda: https://lnkd.in/d9HJ-Vgv

Setting the global agenda for tax, debt, and international aid through 2035 The Fourth International Conference on Financing for Development (FfD4) is a key opportunity to shape global development finance, with a focus on the critical climate-development nexus. Historically overlooked by philanthropy, FfD4 presents funders with a chance to support transformative outcomes by engaging in the process, fostering stakeholder collaboration, and ensuring negotiated language leads to real-world actions. Commissioned by the Trust, Accountability and Inclusion Collaborative (TAI) and authored by Dr. Matti Kohonen of the Financial Transparency Coalition, this brief dives into the process, identifies key players, and outlines why philanthropy’s role is so vital. Read and download the brief here: https://lnkd.in/er9YCnAq #FinancingForDevelopment #GlobalFinance #Philanthropy #SustainableDevelopment United Nations UN Trade and Development (UNCTAD) UNDP United Nations Department of Economic and Social Affairs International Monetary Fund The World Bank World Trade Organization (WTO) OECD - OCDE Michael Jarvis Eszter Filippinyi Yery Menendez Garcia Cristina Ordóñez Leah Eryenyu Darlington Marange Jenny Lah Alejandro Peña Bucheli

As the Second Session of the Preparatory Committee for the Fourth International Conference on Financing for Development (#FfD4) begins tomorrow at the United Nations Headquarters in New York, Kathrin Berensmann, Elise Dufief, PhD, Rob Floyd and I argue in this IDOS blog that the #FfD4 process offers a critical opportunity to ✅ Advocate for the hybrid capital proposal by the African Development Bank Group (AfDB) and Inter-American Development Bank (IDB) for channelling Special Drawing Rights (#SDRs) to Multilateral Development Banks (#MDBs). ✅ Address the political obstacles to its implementation. Since 2021, the global development community has recognised the immense potential of channelling SDRs to MDBs. MDBs can leverage channeled SDRs up to six times! To name just a few recent (November 2024) high-level calls: ➡️ The G20 Rio de Janeiro Leaders' Declaration invites countries "willing and legally able" to explore channelling SDRs to MDBs. ➡️ The Elements Paper for the FfD4 calls for accelerating proposals to use SDRs via MDBs "for countries in a position to do so." However, these calls will remain aspirational unless there is a technically feasible mechanism to operationalise the channelling of SDRs to MDBs. So far, the AfDB-IDB proposal stands out as the most advanced and innovative solution. Despite clear guidance from the IMF, its implementation faces a major hurdle: no country has yet committed to channel SDRs into this hybrid capital instrument, which requires the participation of at least five countries. Stakeholders - including the AfDB, IDB, UN(DESA), developing country governments and civil society organisations - need to use the FfD4 process to convince potential donor countries to participate in the AfDB-IDB proposal. 📝 Read more in our blog below. #SDRs #SDGs #MDBs #FfD4 German Institute of Development and Sustainability (IDOS) African Center for Economic Transformation (ACET) IDDRI

🧐 What is the #ElementsPaper? The Elements Paper guides #FfD4 preparations by proposing commitments, actions and other key elements to be considered for the FfD4 outcome. It builds on more than 250 inputs from Member States, civil society organisations, private sector, international organisations and other stakeholders. 💬 Does the Elements Paper feature #INFFs? Yes! The Paper recognises Integrated National Financing Frameworks (INFFs) as central to the renewed global financing framework and the role they play across action areas focused on public finance, private finance, collaboration with IFIs, innovation and monitoring. Read the Elements Paper here: https://lnkd.in/dFa8YN4q 💬 Want to join the conversation? Join us at the #FfD4 2nd prepcom side event on 4 Dec 2024; 1315-1430 (ET) Details and registration 👉 https://lnkd.in/gtDTKagT -- UNDP, UNDP Sustainable Finance Hub, United Nations Department of Economic and Social Affairs, OECD - OCDE, UNICEF, European Commission, Ministero degli Affari Esteri e della Cooperazione Internazionale, AGENCIA ESPAÑOLA DE COOPERACION INTERNACIONAL PARA EL DESARROLLO - AECID, Sida