ACBF Board of Governors Issues Paper: Accessing Funds for Development: Required Capacities for Resource Mobilization and Absorption

African countries are now implementing the Agenda 2063 and Agenda 2030 (also known as Sustainable Development Goals – SDGs), both requiring huge financial resources. Globally, large amounts of investable resources, mostly private, are available in advanced and emerging economies while domestic public resources, even in low-income countries, can be increased when the relevant capacities are in place. To efficiently mobilize the available resources, therefore, countries need to tackle the binding capacity constraints. These include human and institutional capacity to effectively manage tax exemptions, tax evasion, capital flight, illicit financial flows; constraints to accessing private resources particularly blended finance offered by public private partnership (PPP) avenues; and constraints relating to underdeveloped capital markets in most Africa countries. Beyond the mobilization of resources, limited absorptive capacity for eternally generated resources in particular, has been recognized as affecting the implementation and effectiveness of various projects and programs on the continent. Though its acuteness differs across countries and sub-regions, absorptive capacity remains a persistent challenge which needs to be urgently addressed. This includes public sector human resource capacity; institutional-level capacity around oversight, governance, and legal systems; and project implementation capacity. This Issues Paper, therefore, considers the capacity dimensions related to the mobilization and absorption of funds by responding to the following questions (1) What are the domestic and external resources available for Africa’s development? (2) How can the resources be effectively mobilized? (3) What are some of the good practices employed by countries to ensure that the available resources are effectively utilized and fully absorbed? (4) What have been the capacities required to effectively access and absorb the mobilized resources?