African nations should take charge of their financial destiny, seek self-reliance in financing development and mobilise its own resources to drive growth and development.
Africa should mobilize domestic and the continent’s resources effectively, reduce dependency on traditional external financing, and chart a path toward self-reliance and sustainable growth.
Africa must champion initiatives for growth and self-reliance in the face of shrinking foreign aid. With the United States and other western countries pulling back development Aid,
Africa, which is likely to be among the most affected continents, must rethink, strategise, and explore ways not just to adapt, but to thrive.
Once the largest recipient of U.S. foreign aid, sub-Saharan Africa is now facing a brutal cut in funding, which raises questions about its effects on the region’s development and stability.
Withdrawal of funding support, should not only be cause for concern, but should cause African nations to take bold steps towards self-reliance.
Data shows that in 2021, Africa received USD 64.8 billion in aid.
This dropped to USD 60 billion in 2023, including USD 20 billion less from the US.
Last year, foreign aid from the US shrank further to USD 12.7 billion.
In recent years, foreign aid to Africa has experienced a significant decline, a huge matter of concern.
To address the financing gap, Africa must take bold steps to mobilize its own resources to drive growth and development.
The prevailing trends among African leaders of seeking foreign loans and aid, instead of harnessing the continent’s internal wealth and capacity, is not how Africa will move forward.
The continent must strengthen domestic resource mobilization, improve tax administration, combat illicit financial flows, and encourage a culture of tax compliance.
Also, Africa must adjust its economic priorities and explore alternative partnerships to mitigate the impact of funding disruptions.
African leaders must accelerate implementation of the African Continental Free Trade Area (AfCFTA) to ensure deeper intra-African trade and regional integration as the basis for sustainable growth.
At the same time, there is need to strengthen African multilateral financial institutions, such as the African Central Bank, African Investment Bank, African Monetary Fund and Pan African Stock Exchange, to effectively contribute to the transformation and realisation of the continent’s development goals including Agenda 2063.
It is laudable that African states have embarked on an economic liberation journey in a bid to cut over-reliance on aid.
The ‘Accra Reset’ offers a framework to reduce reliance on shrinking aid flows and strengthen investments in neglected development sectors.
Truth be told, aid dependency and fragmented project-based financing are no longer fit for purpose.
That is why African nations should adopt executable business models, integrated regional markets, and smarter public-private partnerships that unlock domestic and international capital.
At the same time, Africa should push for restructuring of global governance and financing development, and encourage African Multilateral Institutions to increase financing of development and help address significant trade, investment and development gaps across the continent.
As former president of Nigeria, Olusegun Obasanjo, rightly remarked, Africa’s future must be built by Africans, for Africans, with Africans.
Indeed, Africans must pursue self-reliance in financing development with determination, for sustainable growth.
The writer is a Policy Analyst. Email:
Source:
www.graphic.com.gh