Failure to invest in Africa’s youth will lead to widespread joblessness and instability and threaten the Sustainable Development Goals, report warns
The world’s poorest are receiving a declining share of global financial resources according to a new report from The ONE Campaign.
The 2017 DATA Report: Financing for the African Century, shows that global Official Development Assistance (ODA) was $140.1 billion in 2016, a 7.4% increase from 2015 in real terms – but that the least developed countries’ (LDCs) share fell to 28% in 2016, down from 32% just four years ago.
Africa - home to over 50% of the world’s extreme poor - is being hit hardest given donor countries reneging on their ODA pledges, low levels of foreign direct investment (FDI) and falling domestic revenues. The share of global aid going to Africa has dropped from 36% in 2012 to 32% in 2016.
Falling commodity prices have led to a 24% decline in Africa’s revenues since 2012, and FDI was concentrated in only a few countries between 2014 and 2016: 73% of FDI to Africa went to 10 countries.
The report warns that these trends are unfolding at the worst possible time given the need and opportunity to harness Africa’s ‘Demographic Dividend’. The continent’s population is set to double by 2050. Increased investments from aid, private flows and domestic resources are required to finance the education, employment and empowerment of this growing youth population which, according to leading economists, is pivotal to lift the least developed countries out of poverty, accelerate sustainability and build long-term prosperity.
Nachilala Nkombo, ONE Africa interim executive director said: “Domestic funding plays a crucial role in our continents development, not only are domestic resources the largest source of finance in African country’s, they are also key for cementing the social contract between country’s and their citizens. Foreign direct investment between African countries also plays a key role in growing our economies therefore, African leaders and investors should not only rely on ODA and FDI coming from abroad but must increase domestic funding and African rooted FDI in strategic sectors such as agriculture, education and health, to ensure their country’s development”
Gayle Smith, CEO and President of ONE said: “The engine that could power Africa’s development is not getting the fuel it needs. Donors need to fulfil their commitments to the world’s poorest, and all countries need to work together to increase private capital flows and domestic resources.”
"Failing to capitalise on Africa’s Demographic Dividend will have a global impact – affecting both rich and poor countries – with more instability and population displacement" Smith cautioned.