Wednesday, June 24, 2009

Finance PS urges enhanced domestic resource mobilization

Finance PS urges enhanced domestic resource mobilization
Written by Kabanda Chulu

FINANCE permanent secretary Emmanuel Ngulube yesterday said there is need to enhance mobilisation of domestic financial resources since foreign aid comes with attached conditions that constrain a government’s level of freedom to design its own strategies.

And United Nations Economic Commission for Africa (UNECA) Southern Africa director Jennifer Kargbo has said the mobilisation and sound management of regional resources for development cannot happen without mainstreaming regional integration into national development plans (NDPs).

Officially opening the UNECA Intergovernmental Committee of Experts meeting themed ‘Enhancing domestic resource mobilisation: challenges and opportunities for Southern Africa’ in Lusaka, Ngulube said external aid in some respects might be the best option though its availability was highly constrained by donors’ willingness to commit and deliver aid.

“Even aid in the form of grants typically comes with policy strings and attached conditions that may constrain a government’s level of freedom in designing and implementing its development strategy and the availability of grants may also, to a certain extent, encourage dependence on foreign aid,” Ngulube said. “Economic development is a domestically-driven enterprise and no amount of foreign assistance or investment in its many forms can substitute for a dynamic and domestically driven capital accumulation and mobilisation of resources.”

He said many Southern African countries had pursued a number of reforms aimed at strengthening the mobilisation of tax revenues as part of the domestic resources mobilisation process.

“Introduction of such new taxes as value added tax, rationalisation of trade tariffs, strengthening of tax offices, reform of incentive structures and reduction of subsidies, are some of the reforms being implemented in domestic resources mobilisation process,” said Ngulube. “Also public expenditures have risen steadily and faster, leaving a growing deficit and the quality of expenditures in delivering socially productive outcomes has been questioned.”

And Kargbo said member states were encouraged to conduct in-country studies to ascertain the best approach to accelerate policy and institutional domestication of regional integration.

“This is an acknowledgement that countries are unique and face different socio-economic situations but member states should spare no effort in meeting regional integration challenges as they pertain infrastructure to facilitate physical integration, trade liberalisation, fulfilling financial obligations and enrolling the private sector and civil society as partners,” said Kargbo.

“But we need to add urgency to this process especially that mobilisation and sound management of regional resources for development cannot happen without first having mainstreamed regional integration into NDPs.”

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