The Nordic Africa Institute


Inclusive development – Financing options

Started • 01 January 2019

The Sustainable Development Agenda lists several important targets to improve overall living conditions around the world. The situation is particularly acute in a number of countries in sub-Saharan Africa, where a large share of the population lacks access to such basic services as education, health and infrastructure.

Countries need to be able to finance increased public spending on public goods that are critical to development, particularly human capital and infrastructure. Aid inflows, borrowing and rents from natural resource extraction can provide much-needed funding but governments also need to reform their tax systems, in order to increase revenue and diversify the revenue base. Mobilising revenue in sustained manner also requires a tax system that do not undermine the prospects for mobilising future revenue.

This project involves several components:

  • First, what is the role of external borrowing in the development process?
  • Second, can resource extraction contribute to inclusive development?
  • Third, a focus on taxation indirectly cover such broad themes as state-building, structural transformation, gender and inclusiveness. How do tax and transfer system contribute to an inclusive development agenda.

The project is based on country-specific case studies as well as a review of the literature.