As Rwanda celebrates the 75th birthday of the United Nations, another milestone was observed: the launch of a process to forge an Integrated National Financing Framework (INFF).
At least fifteen countries are moving forward with preparing INFFs, with over sixty expected to follow in the footsteps.
At the high-level launch event, graced by the Prime Minister of Rwanda, and attend by the Ministers of Finance and Economic Planning, Foreign Affairs and International Cooperation, Trade and Industry, and Health, on the table was a discussion with senior members of the diplomatic community and development partners on how partnerships were vital to create the future all Rwandans wish to see.
That the INFF can be key for securing Rwanda’s future can be boiled down to the need for moving “from the billions to the trillions” in realizing the 2030 Agenda for Sustainable Development and Vision 2050.
Ultimately, the INFF will help Rwanda realize a paradigm shift in how it raises the required funds to implement the National Strategy for Transformation (NST1) and its locally owned action plan for all 17 Sustainable Development Goals (SDG), encompassing targets aligned to NST1 for ending poverty, reducing economic inequalities, improving education and health, and tackling climate change whilst spurring economic growth.
The scale of the challenge before the international and global investor community is great. According to an expert report for the UN Conference of Trade and Development, $2.5 trillion must be mobilized every year until 2030 to meet the SDG financing gap, globally. Sadly, the world is not on track.
Likewise, a recent IMF study estimated that for Rwanda to meet its SDG targets in selected sectors, it must incur additional spending amounting to 18.7 percentage points of GDP in the coming decade. Clearly, time is of the essence to catalyze this finance.
At the same time, the economic and social impact of the Covid-19 pandemic has rendered the need for an INFF greater than ever before. Escalating trade and logistics barriers, rising levels of indebtedness, lower wages, and mounting job losses, are all taking a toll on the global economy.
Rwanda is no exception. Reduced fiscal space and a decrease in new lending to private sectors in the first half of 2020 of 9.2% according to the National Bank means that efforts to ensure existing spending is both allocated and executed effectively is paramount.
The INFF process can reinforce the core foundations for building back better by strengthening the links and alignment between planning processes, financing policies and financial management systems, on the basis of diagnostics and risk-informed projections.
Mobilization of sufficient financing to meet current fiscal and trade balances, whilst ensuring the National Economic Recovery Plan and strategic investments can be funded during a time of increased austerity will be a critical challenge.
Moreover, since climate and development are intrinsically linked it goes without saying that financial innovations and green finance has a central role to play in ensuring Rwanda’s transformation to a climate neutral and resilient future.
It is therefore promising to see continued leadership in the area of promoting green financing, digital innovations, fintech, and regulatory reforms to ensure an enabling environment for private-led and inclusive development.
The creation of the Kigali International Financial Center, the Rwanda Innovation Fund, and Rwanda’s National Climate Fund (FONERWA) are promising steps. The INFF process can leverage these gains by operationalizing new models for private sector financing and mechanisms for innovative development financing partnerships.
Given that the widest financing gap in reaching Rwanda’s targets for its national development plan comes from private domestic & international sources, continued vision and pioneering spirit is called for. With support from the UN and development partners, the INFF process will enhance private SDG financing, including stronger development corporation and corporate social responsibility investment frameworks.
These envisioned next steps will crowd in new sources of capital and business partners on the SDG Finance agenda, while ensuring the trajectory of the Rwandan economy effectively pivots toward greener and gender-inclusive heights in a post Covid-19 world.
The African proverb 'If you want to go fast, go alone, but if you want to go far, go together' was never truer than in the context of confronting these challenges. INFFs are not merely policy frameworks.
Their elaboration can invigorate a whole-of-government approach toward the national development agenda and the SDGs—one that unifies all stakeholders behind measures, so everyone plays their part.
In this way, actors may leverage their comparative advantage in mobilizing, managing, and targeting resources where they are needed most to ensure no one is left behind.
The writer is Senior Adviser Resource Mobilization & Development Effectiveness at UNDP Rwanda
Originally published on The New Times