Financing the Future of Africa’s Development

This lecture-report maps Africa’s development finance landscape across four instruments—ODA, debt, PPP/private capital, and Domestic Resource Mobilization (DRM)—and argues that while global liquidity is ample, Africa’s progress is constrained by aid shortfalls and design flaws (e.g., ODA still below the 0.7% GNI commitment) and by a structurally costly financing environment. It foregrounds DRM as the pillar with greatest control yet most headroom—African tax-to-GDP averages 16.6% versus the Addis target of 24%—and diagnoses leakages (inefficient spending, illicit financial flows, and redundant tax expenditures) that together drain about US$204 billion annually; remedies include BEPS curbs, effective international tax cooperation, and fast-tracking Domestic Minimum Top-up Tax adoption. The report highlights remittances’ resilience (US$669 billion to LMICs in 2023) but urges lowering Africa’s remittance costs (≈8%) toward the 3% SDG target and scaling diaspora bonds to channel savings into productive investment. It calls for a fit-for-purpose global architecture—bigger, more flexible MDBs; orderly, faster sovereign debt workouts with disaster clauses; and mechanisms to re-channel SDRs—while correcting credit-rating biases that inflate African borrowing costs. Finally, it advances an Africa-centered playbook—industrialization anchored in AfCFTA, SEZs and clusters; patient-capital SPVs for SMEs; and scaled innovative finance and blended facilities—so that public, private, and diaspora capital are aligned with national “development bargains” to finance the SDGs and Agenda 2063 sustainably.