Data: The first step to improving finance in African cities

By Astrid R.N. Haas, Manager of Cities that Work, International Growth Centre


This blog is part of an ongoing series exploring the intersection between intermediary cities in developing countries and sustainable development


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Hargeisa, Somalia. Photo: Shutterstock.com

Many African cities are urbanising rapidly. Yet, they are unable to adequately service their growing populations with the necessary infrastructure and amenities due to a lack of finance. Furthermore, retrofitting infrastructure on a city that has already grown is significantly more expensive. Improving local government finance is therefore very high on these cities’ agendas.

Cities can improve their finances in various ways. Perhaps one of the most underutilised yet high potential methods is property tax. Why? Rapid population growth is generally accompanied by a construction boom, increasing the number of properties. Furthermore, if demand for properties rises faster than supply, this will also increase property values. And such values will further benefit once public investments in infrastructure as well as improvements in service delivery are made. All these factors have a positive impact on property tax collection, and thus have the potential to unleash a virtuous cycle for local government revenue.
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Make AfCFTA a reality

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By Abdoul Salam Bello, Advisor to the Executive Director, Group Africa II, World Bank Group; Visiting Fellow, Africa Center, Atlantic Council; and Author of “La régionalisation en Afrique: Essai sur un processus d’intégration et de développement” (L’Harmattan 2017)


Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa


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The March 2018 signing of the framework agreement to form a continental free-trade zone throughout Africa is raising a lot of expectations. In fact, the African Continental Free Trade Area (AfCFTA) would be the largest free trade agreement since the founding of the World Trade Organization. It will include 1 billion people and up to USD 3 trillion of cumulative GDP.

Amongst the AfCFTA’s expectations is a significant boost in intra-trade. At just an 18% share of total trade, Africa has the lowest levels of intra-continental trade in the world. While the continent’s trading blocs have helped to improve these figures, the level of intra-trade in Africa is a far cry from the levels witnessed in Latin America (35%) and Asia (45%). Furthermore, Africa’s intra-continental trade has been substantially outpaced by trade with the rest of the world – often by as much as 90%.

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Raising capital for intermediary cities

By Jeremy Gorelick, Senior Infrastructure Finance Advisor, USAID’s* WASH-FIN (Water, Sanitation and Hygiene – Finance) Programme, and Joel Moktar, Project Leader, Open Capital Advisors


This blog is part of an ongoing series exploring the intersection between intermediary cities in developing countries and sustainable development


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Intermediary cities are the fastest growing cities in the developing world. Often referred to as secondary or second-tier cities, intermediary cities typically have a population of between 50,000 and one million people. They play a fundamental role in connecting both rural and urban areas to basic facilities and services.[1] Driven by population growth and rural-urban migration, intermediary cities worldwide are projected to grow at almost twice the rate of megacities (those with more than 10 million inhabitants) between now and 2030.[2] Of these, the fastest growing cities are in Africa and Asia.[3]

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It is time for a new finance paradigm in development

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By Arthur R Wood, Founding Partner, Total Impact Advisors; Convenor, Project1800.org


This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


On 27 November 1095, Pope Urban declared the crusades ostensibly a religious call, but one that reinforced the power of the spiritual over the temporal. To support the crusades, the church built a financial institution by leveraging the Templars under the Papal bull Omnes Datum Optimum, creating a monastic banking system that gave birth to such financial innovations as letters of credit, banking and, by extension, fiduciary products like trusts.

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Development Finance 2.0: From Billions to Trillions

By Harald Hirschhofer, Senior Advisor, TCX [1] 

development-financeAchieving the Sustainable Development Goals (SDGs) will require an enormous increase in external financing flows to developing countries. Development Finance Institutions (DFIs) have gradually started to shift their business model towards de-risking services to crowd in long-term, low-risk private capital. However, the targeted scaling up of private investment from billions to trillions to realise the SDGs contains massive risks for stability. And good macro-policies are needed, in turn, to address such underlying risks. Countries that need the greatest amount of development finance are often those that have domestic financial resource constraints and underdeveloped markets. Financing their growth and investment opportunities makes the management of exchange rate risks, which are inherent in development finance, a critical challenge.
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Multilateral action for sustainable development: How to build on the strength of ODA?

By Jorge Moreira da Silva, Director, Development Co-operation Directorate and Charlotte Petri Gornitzka, Chair, Development Assistance Committee

Multilateral wheelIn the backlash against globalisation and multilateralism and despite tightening national budgets, OECD countries’ combined Official Development Assistance (ODA) remains strong. While some criticise recently-released ODA figures for stagnating, steady commitment has been undeniable.

Indeed, ODA has remained politically resilient, steadily increasing since the turn of the century and doubling since 2000. In 2017, net ODA stood at USD 146.6 billion or 0.31% of gross national income (GNI). While this aggregate figure reflects a slight drop of 0.6% compared to 2016, previous figures were artificially high due to the refugee crisis that increased donor spending within their own borders. That spending subsided this year, and when in-country refugee costs are excluded, ODA increased by 1.1% from 2016 in real terms.

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Statebuilding without the State: Getting beyond “chicken and egg” in Somalia

By Dan Honig, Assistant Professor of International Development, Johns Hopkins SAIS, and Sarah Louise Cramer, UN-World Bank Aid Coordination Officer for Somalia

The credibility of the Somali Government hinges largely on its ability to deliver for the Somali People.” International partners clearly recognise the importance of using country systems to achieve broader statebuilding goals, as this line, taken from the May 2017 Communiqué of the London Conference on Somalia, indicates. Yet, international partners continue to deliver aid primarily through parallel systems, as the Government struggles to raise sufficient domestic revenue to deliver tangible results for its people.

DW: Lessons for Peace in Somalia 

Of an estimated USD 1.75 billion in official development assistance (ODA) for Somalia in 2017, only USD 103.9 million was delivered on budget (approximately 6% of total ODA). Excluding humanitarian aid from this calculation, the proportion of on budget aid rises to 14%, which still lags significantly behind the use of country systems in other fragile states. For example, donors delivered between 28-44% of development-focused aid on budget in the Central African Republic, Mali and Liberia in 2015.[1]

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