{"id":6238,"date":"2014-11-07T06:00:42","date_gmt":"2014-11-07T06:00:42","guid":{"rendered":"https:\/\/africaresearchinstitute.org\/wordpress\/?p=6238"},"modified":"2016-03-11T14:08:34","modified_gmt":"2016-03-11T14:08:34","slug":"financing-sustainable-development","status":"publish","type":"post","link":"https:\/\/africaresearchinstitute.org\/wordpress\/financing-sustainable-development\/","title":{"rendered":"Financing Sustainable Development"},"content":{"rendered":"

Ahead of ODI’s CAPE conference<\/a>, Kieran Holmes, the former\u00a0Commissioner General of Burundi\u2019s revenue authority, argues that sustainable development cannot happen without effective domestic revenue mobilisation.\u00a0<\/em><\/p>\n

Kieran is one of the co-authors of an ARI report detailing efforts to reform tax collection and administration in one of Africa\u2019s poorest nations (available either in\u00a0English<\/a>\u00a0or\u00a0French<\/a>).\u00a0<\/em><\/p>\n

\"tax<\/a>

Accra, Ghana, 2001; Walt Jabsco (CC BY-NC-ND 2.0)<\/p><\/div>\n

\u00a0<\/address>\n

As the world attempts to finalise the content of sustainable development goals, even as we know that many countries will fail to meet the Millennium Development Goals by 2015, for me one fact is clear \u2013 there is little chance of sustainable development without effective domestic revenue mobilisation.<\/p>\n

Indeed I will be joining a panel to discuss <\/b>this very issue at the 2014 Centre for Aid and Public Expenditure conference on 12 and 13 November <\/a>focusing on <\/i><\/b>\u201cDomestic revenue generation, international public finance and the Sustainable Development Goals \u2013 All good things go together?\u201d<\/i> <\/b><\/p>\n

Domestic revenue mobilisation means collecting taxes and other non-fiscal charges from a country\u2019s entire revenue base.\u00a0 It implies the effective use of those revenues for infrastructural development, both hard and soft, and for improved services, particularly health and education, to the population.\u00a0 Stimulating a country\u2019s own revenue base is the only sustainable way to provide the funds needed for infrastructural development and service delivery because all other sources of finance are smaller or less efficient than tax revenues.<\/p>\n

As we all know aid revenues are volatile, particularly since the onset of the international fiscal crisis.\u00a0 In any event, aid is of course undesirable in the long run since it encourages dependency, impacts negatively on sovereignty and often, for its own reasons, tends to take key financial decisions out of the hands of the recipient country or at least takes the greater portion of that decision-making away.<\/p>\n

The inward flow of emigrants\u2019 remittances, while often much greater in value than international development assistance, is equally inefficient for our purposes since remittances by their very nature are directed towards households and tend to be consumed on typical household expenditure.<\/p>\n

All countries compete for foreign direct investment but these inward investment flows are often patchy and sporadic and of course they flow towards areas where profits are seen to be possible, which is often where natural resources need to be extracted; indeed they rarely flow to areas in greatest need of development and poverty alleviation. The quality of FDI is hugely variable and poor countries often tend to attract the kind of footloose, transient, exemption-seeking investment that provides little or no linkages or job creation.<\/p>\n

Finally, the potential revenues to be gained from effective revenue mobilisation dwarf all other forms of financing.\u00a0 Some examples from the countries where I have worked are: –<\/p>\n