Not just more, but better – effective financing of the SDGs
22 May 2017 by Magdy Martínez-Solimán, Director of the Bureau for Policy and Programme Support.
As discussions begin this week at the ECOSOC Forum on Financing for Development (FfD) Follow-up, we will no doubt be reminded that the costs of financing the Sustainable Development Goals (SDGs) are enormous and that inadequate resourcing of the agenda is critically hindering progress. While the sum needed to achieve the 2030 Agenda for Sustainable Development is unprecedented, the international community should remember there is no silver bullet to fund the SDGs.
Bankrolling sustainable development cannot happen through global financing agendas alone, but should instead be built from a bottom-up, holistic and context-driven approach. As countries strive to manage increasingly complex financing flows at the national level, as domestic public and private resources increase, and as the sources of external resources diversify, we need urgent and targeted solutions.
How then, given such a complicated landscape, can governments effectively mobilise and manage money for real development results?
The concept of Integrated National Financing Frameworks (INFFs) acts as a guide for countries to assess the status of their overall financing frameworks and prioritise actions to help achieve the SDGs. These frameworks, cited as a crucial part of the way forward in the Addis Ababa Action Agenda, prompt policymakers to take a holistic view of their financing strategies within the context of comprehensive planning and budgeting.
INFFs propose six ‘building blocks’ to ensure that government policies and systems interact and work together in a cohesive manner, including: leadership that enables coherence across the government; a clear vision for results; an overarching strategic financing policy; operational financing policies for specific flows; and a monitoring, evaluation and learning system with strong processes to promote accountability and multi-stakeholder dialogue. On the first building block, and according to the OECD, Governments of the richest countries in the world who are implementing the SDGs at home have determined that placing the 'control room' in what they term the 'Centre of Government' (President’s Office, Prime Minister’s Office, Chancellery, Privy Council, Cabinet Office or other central decision-making and coordination platform) is a defining feature of success in the implementation of Agenda 2030.
As highlighted in the Financing for Development Inter-Agency Task Force report, released last week, INFFs can prompt governments to take a closer look at their financing frameworks and can initiate thinking around policy or institutional reforms. This new approach underscores the need for an integrated vision of fiscal planning and management that transcends traditional public financial management and also considers private resources.
Many governments are taking a two-phase approach to inform their holistic financing approaches: a Development Finance Assessment (DFA), followed by Integrated Financing Solutions.
The DFA provides an overview of the country’s financing landscape and an examination of the supporting conditions for an INFF, identifying gaps and areas for further strengthening. This government-led assessment is tailored to the country’s own context and priorities, and brings together diverse actors around a collective assessment of financing challenges and opportunities.
In the Philippines, the DFA informed the Development Finance Chapter of Ambisyon Natin 2040, the country’s Long Term Vision, which the President approved to trigger a more holistic financing strategy and achieve ‘a prosperous, predominantly middle-class society where no one is poor’. This year, ASEAN countries are also using their respective DFAs as a basis for dialogue on how the region will finance the SDGs.
The first African DFA, in Mozambique, is now being used as a foundation to establish a framework aimed at strengthening government co-ordination, especially within the Ministry of Economy and Finance, with private sector, development partners, and civil society organisations to ensure wide buy-in, accountability and action for the SDGs.
The Development Finance Assessment’s key value lies in using its conclusions to implement action-oriented solutions. To do this, policy makers can follow up the DFA by using the Financing Solutions for Sustainable Development toolkit, which provides guidance on how to weigh various financing instruments and direct investments for real progress in sustainable development. In addition to follow-up actions focused on resource mobilization, recommendations from the DFA also lead to policy and institutional reform and capacity development initiatives.
While consistently supporting governments in devising their INFFs, a closely linked approach is being taken by the United Nations development system in the preparation of country specific financing strategies accompanying the United Nations Development Assistance Framework (UNDAF) to ensure consistency of financial flows towards common development results.
This week’s FfD discussions serve as a reminder that it’s not just more financing we need, it’s better, more strategic financing. This is an opportunity to look at managing and mobilising funds for the SDGs through a new lens. In order to link financing sources with real results, a bottom-up, holistic approach at the country level is the only way we’ll be able to connect the dots in time for 2030.
If you are interested in further discussion on INFFs, join the side event 'Achieving the Addis Ababa Action Agenda and Sustainable Development Goals at country level: mobilising and managing complex financing with the Integrated National Financing Frameworks' on 25 May 2017, 8:00-9:30 in Conference Room 7, UN Secretariat.
For further information on countries who are implementing the Development Finance Assessment and Integrated Financing Solutions, click here.