MDG 8: African Countries can Benefit from Domestic Revenue Generation

By Paul Okediji

Achievement of MDG 8 remains crucial for African countries to individually and jointly achieve all the millennium development goals. And as progress towards the other MDGs have been gradual, African countries can benefit from continuous international assistance, and more importantly, domestic revenue generation.

Finance still remains a major item on the agenda of most countries globally. And as the impact of the global economic recession weighs on aid budgets in donor countries, the challenges of meeting the MDGs is becoming unaffordable on official development assistance (ODA) from donor countries alone. This then means that countries, especially African countries, would have to source for funds elsewhere in order to avoid slow progress towards the MDGs.

It is believed that improved domestic tax collection and management would help in financing African development. As a result of this, tax revenues have been rising across the developing world, especially Africa. Nonetheless, there are country disparities as in 2009, Burundi, DR Congo, Ethiopia and Guinea Bissau only collected about $35 per citizen while in contrast, Equatorial Guinea, Libya and the Seychelles collected taxes of over $3500 per capita.

In 2010, ODA from donor countries amounted to about $129 billion (0.32% of Development Assistance Countries’ Gross National Income), a historic record. The amount reaching Africa reached $29.3 billion within the same period, an increase of 3.6% from 2009. This was a continuation of the increasing trend in ODA to Africa since 2004. However, development partners still need to intensify their efforts in meeting their commitments in full, while African nations strengthen their efforts to boost domestic resources.

Between 2001 and 2009, only 42% and 58% of public and private facilities respectively had access to affordable essential drugs, implying that access to essential drugs is problematic. However, plans are in place focusing on expanding local production capacity, including the African Union’s Pharmaceutical Manufacturing Plan for Africa, the Pharmaceutical Business Plan of the Southern African Development Community and the draft regional pharmaceutical manufacturing plan of action of the East African Community.

There has been no growth recorded in the number of fixed telephone lines, largely explained by the portability and attractiveness of mobile telephony. Conversely, there has been a huge growth in cellular subscribers as the spread of mobile cellular service remains fast in Africa. Similarly, there has been an increase in internet penetration rates although this is low relative to other regions of the world.

In order to achieve the MDGs, two things are essential – international cooperation and global partnership. To this end, the international community has re-committed to meeting its pledges to accelerate the progress towards the MDGs at different forums. It still behooves African countries to source for alternative means of financing, strengthen efforts to mobilize domestic resources and foster intra-continental trade to alleviate the adverse effects of the global debt crisis.

This is a summary of the MDG 2012 Report for Africa

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