Introduction

The debate about what should replace the Millennium Development Goals (MDGs), come 2015, provides an opportunity to reflect once again on the Financing for Development (FFD) agenda. It also comes on the back of dramatic reductions in global poverty in the last decade, and when many of the so-called fragile and conflict-affected states – many of which are located in Sub-Saharan Africa – are the least likely to meet any of the MDGs. Poverty remains stubbornly high in Sub‑Saharan Africa – despite a fall in poverty rates, the number of people living on less than US$1.25 per day has increased from 205 million in 1981 to 414 million in 2010 (data from PovcalNet, The World Bank). A coherent and realistic FFD agenda is thus critical to the success of both the post-2015 process as well as the achievement of new goals and targets. Much like the original MDGs were accompanied by the Monterrey Consensus on FFD (UN, 2003), the post-2015 agenda will likely be accompanied by a new or updated FFD framework.

The Monterrey Consensus outlined six leading actions to meet the challenge of financing the MDGs. The first among these was domestic resource mobilisation (DRM). DRM, as outlined in the Monterrey Consensus, comprised fiscal revenue mobilisation (that is, tax and non-tax revenue mobilisation), but also strengthening the domestic financial sector in developing countries by encouraging the orderly development of capital markets, sound banking systems and increasing financial inclusion. For the purposes of this chapter we limit our analysis of DRM to domestic revenue mobilisation, that is, issues related to taxation and revenue mobilisation, with an emphasis on DRM in Africa.

The Third International Conference on FFD took place on 13-16 July 2015 in Addis Ababa, Ethiopia (UN, 2015a). This follows prior FFD conferences, beginning with the landmark Monterrey Consensus (see above) in 2002 and the Doha follow-up conference in 2008. DRM, which has been recast as ‘domestic public finance’, again emerges as a top priority. Recent discussions highlight important progress since Monterrey. Developing countries on average have achieved revenue increases of 2 to 3 per cent of GDP, with some achieving increases of up to 5 per cent (UN, 2015a).