Speech read by Prof Emmanuel Nnadozie, ACBF Executive Secretary at the launch of the 2015 Africa Capacity Report titled “Capacity Imperatives for Domestic Resource Mobilization in Africa” on 7 December, 2015 in Harare, Zimbabwe. The ACR is the ACBF flagship publication and has been published since 2011.
I wish to extend a very warm welcome to all of you. Thank you for joining us today at the Global Launch of the Africa Capacity Report (ACR) 2015 on the theme ‘Capacity Imperatives for Domestic Resource Mobilization in Africa’. While we are launching this Report here in Harare, similar events are also taking place in our regional offices in Nairobi and Accra and in strategic cities like Geneva with the support of our partners.
The global launch of the Africa Capacity Report and your presence here this morning reflect a common concern and responsibility for effective decision making on the best ways to finance African countries’ development agenda. Domestic resource mobilization is a very wise way if we are to sustainably finance our development. Some countries have well understood and are putting in practice that wisdom; they have been working in a smart and very efficient manner to mobilize domestic resource for their development.
Here, I would like to commend the efforts made by Zimbabwe in terms of domestic resource mobilization. An interesting experience from Zimbabwe has been the extension of the tax reforms to the informal sector (which is a major challenge for all our countries) in the form of a presumptive tax. The presumptive tax legislation was introduced in 2005, and further reinforced in 2011, targeted at broadening the tax. Selected sectors such as operators in transport sector (which include omnibuses, taxi-cabs, driving schools, and goods vehicles), hairdressing saloons, informal traders, cross-border traders, restaurants, bottle-store, cottage industry and commercial waterborne vessels are expected to pay presumptive tax on a quarterly basis.
Moreover, allow me to express my gratitude to Honorable P.A. Chinamasa, Minister of Finance and Economic Development of Zimbabwe, here present, for his commitment and support to ACBF. I am sure Honorable will share more about the experience of Zimbabwe which has been supporting the Foundation since its inception in 1991. We are very grateful to the Republic of Zimbabwe for the long lasting collaboration and constant support throughout the years.
Ladies and gentlemen
This Report is the most comprehensive study of Africa’s capacity development issues ever undertaken, and it is the product of invaluable cooperation with many stakeholders and renowned experts. There are too many to name individually but, suffice to say, without their excellent engagement, this work could not have been completed. This years’ report has looked at the very key and strategic issue of the capacity dimension of domestic resource mobilization. The importance and role of domestic resource mobilization in Africa’s sustainable development and transformation cannot be overemphasized enough.
At this point in time, more than ever before, enhancing domestic resource mobilization in Africa is not just choice, but a necessity. Besides increasing our countries’ ownership and accountability, domestic resource mobilization reduces the volatility associated with outside funding. Now, given the recent adoption of the Sustainable Development Goals, and the commitment of our continent to implement the Agenda 2063, which is Africa’s development blueprint, it is equally important to consider how these wider agendas will be financed. Domestic resource mobilization appears to be the way to go.
Optimism over delivering on the ambitious Agenda 2063 and post-2015 agenda relies in part on the fact that more countries are becoming aware of the need to mobilize domestic resources to finance their own development. However, beyond the political will and the optimism, what is needed to ensure that we tap into the potentialities offered in terms of domestic resources? What capacities are needed to ensure that we mobilize and efficiently utilize domestic resources to finance their own development?
Ladies and gentlemen
It is in recognition of the crucial and strategic role capacity plays in the mobilization and utilization of domestic resources for Agenda 2063 and the post-2015 agenda that the African Capacity Building Foundation (ACBF) has decided to consecrate its flagship Report on the ‘Capacity Imperatives for Domestic Resource Mobilization’.
Allow me to share few highlights from the Report which I encourage you all to use as your bedside book. One important finding is that in domestic resource mobilization, African countries show a wide diversity of experience, while there were no successful cases of successfully combating illicit financial flows. The Report also shows that few African countries grasp the fact that a tax system derives its legitimacy from a clear connection between payment of tax and the provisioning of beneficial economic or social infrastructure.
The Report is recommending African governments to invest in awareness and education campaigns so that citizens are better informed on the way resources are used in service delivery. Transparency on spending on social programs is needed. Moreover, there are issues with the human, technical, legal, regulatory, and financial capacities to deal with illicit financial flows. Substantial effort and political will are required at domestic level. Better trained staffs with specialized skills are required, as well as tighter coordination among local institutions. Human resources must be mobilized for the creativity, innovation, and energy needed for broad-based domestic resource mobilization. This has implications for the continent’s training and education systems.
Ladies and gentlemen
Talking about training and education systems means I am talking about the key recommendations for implementing the outcomes of the Report. This will indeed need the collaborative efforts of all stakeholders, starting with our governments (local, national and continental) in particular the tax administrations and revenue authorities, the parliaments, the civil society, the development partners, the private sector, and the population.
The Report further recognizes that in order for the key findings to reach their full potential in achieving efficient domestic resource mobilization and utilization, the recommendations must be widely accepted and utilized across a wide range of people and organizations. I am therefore calling you all for action. The immediate challenges ahead for enhancing domestic resource mobilization are to convert what we know from fiscal policy implementation, narrow tax base, and rigid/inefficient tax administration systems into useful tools, processes and pathways; to incorporate these resources into a system of quality service delivery for taxpayers; and, to build synergy (the necessary human and institutional capacity) for quality service delivery in our countries.
Quality service for taxpayers must be readily and effectively delivered by governments and augmented and reinforced by other stakeholders in the community. We invite you, as a committed revenue authority, parliamentarian, civil society activist, educator, or decision-maker, to review this report and assist in the larger effort of advancing domestic resource mobilization and better ensuring domestic resources are efficiently mobilized and utilized.
ACBF is already working with some partners in implementing the recommendations of the High Level Panel Report on Illicit Financial Flows from Africa. Emerging from this Africa Capacity Report is the necessity to have training programs around domestic resource mobilization. What can you and your organization do with respect to the menu of implementation activities?
Please join ACBF in for example supporting the development and provision of professional education and training through the certification of training modules, the support to problem-based/skills development programs, and the development of curricula and tool kits.
Ladies and gentlemen
I would like to conclude by reaffirming ACBF’s commitment to work with donors, development partners, and governments in developing capacity building programs around domestic resource mobilization for Africa’s sustainable development. I am very glad to inform you that ACBF is already planning with the Economic Commission for Africa to develop domestic resource mobilization capacity building program on the continent. For such a program to succeed, we will clearly need the political and financial support of African governments, donor partners and development stakeholders.
I sincerely hope that this launch will provide an opportunity to continue moving towards global solutions and taking the required initiatives to tackle our development challenges.
Thank you for your attention.
