Africa's multi trillion dollar SDG funding gap demands urgent financial reforms

Baku, 16 November 2024 (ECA) - Hanan Morsy, Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa (ECA), has highlighted the urgent need for financing to help Africa achieve the Sustainable Development Goals (SDGs) by 2030.

Speaking during the CEEW Leaders' Dialogue at COP29 in Baku, Azerbaijan, on November 16, Ms. Morsy lamented that the global SDG financing gap has now expanded to $4 trillion annually. Africa alone requires $170 billion each year to address shortfalls in energy, water, and transport infrastructure. "Without sweeping financial reforms, Africa's future could be at risk," she warned.

The ECA Chief Economist emphasized the disparity in global clean energy investments, noting that despite Africa's vast renewable potential, the continent receives only 2% of global clean energy funding. Africa remains home to over 75% of the global population without electricity and nearly half of those lacking clean cooking solutions.

"That's not just an economic failure; it's a failure of vision, a missed opportunity for the world."

Addressing this imbalance, Ms. Morsy underscored Africa's potential in green industrialization, warning that exporting raw materials equates to exporting development opportunities. She argued for incentives that promote local processing and value addition rather than raw resource exportation.

"Aligning global incentives with sustainable visions could help Africa leverage its resources to drive economic growth," Ms. Morsy stated.

She proposed a three-pronged strategy to close Africa's SDG financing gap. First, she called for affordable finance at scale, advocating for multilateral development banks to mobilize concessional financing on an unprecedented scale. "SDRs should be rechanneled to where they are needed most," she argued, urging the capital markets to become instruments of opportunity rather than barriers.

Secondly, she made the case for a "just debt framework," emphasizing that no nation should be crippled by debt while striving for development. Reforms to the G20 Common Framework and new tools like green and blue bonds could create fairer financial terms.

"We must create conditions where investors view Africa not as a risk but as an opportunity," Ms. Morsy said.

Finally, she highlighted the need for Africa to harness its own resources. Strengthening tax systems, curbing illicit financial flows, and building local capital markets, she argued, would unlock vast pools of domestic capital, empowering African nations to lead their development.

Ms. Morsy also noted the interconnected nature of today's global challenges. "Shocks are everybody's problems," she said, pointing out that climate and development issues affect everyone. She advocated for a shift in global narratives to emphasize human impacts over statistics, stressing that decisions made today will shape the future.

Ms. Morsy's remarks underscore a shared global responsibility to act. "Africa's future is the world's future," she concluded, calling for a collective effort to build a just, equitable, and sustainable world.

Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: [email protected]