ASSOCIATION OF EUROPEAN PARLAIMENTARIANS WITH AFRICA (AWEPA) AND SADC PARLIAMENTARY FORUM (SADC-PF) 4 December 2013 Seminar Theme: “Enhancing SADC Parliamentary Participation in Development Effectiveness” ABG’S Ten Step Guide to Domestic Resource Mobilization for Inclusive Business Development OUR FOCUS – WWW.ABGHQ.COM ABG Background: Founded in 2005 and comprised of a multi-disciplined and multinational professional consulting team, Africa Business Group (ABG) is a South Africa based, continentally active, economic development and business development advisory services company Overarching Focus: Private Sector Development in Africa Geographic Focus: Africa – 5 AU Regions and Fostering Continental Internal and Global Economic Linkages toward Growth and Development Sectoral Focus: Infrastructure – Energy – Renewables and Efficiency; Agriculture – Value Chain Development – Finance; Tourism; Manufacturing/ Value – Added Production Continental Institutional Working Relationships: AUC (African Union Commission), NPCA (NEPAD Planning and Coordination Agency) , RECS (Regional Economic Communities) – EAC (East African Community), ECOWAS (Economic Community of West African States), SADC (Southern African Development Community), COMESA (Common Market of East and Southern Africa), AfDB (African Development Bank), UNECA (UN Economic Commission for Africa), AFUR (African Forum of Utility Regulators), UNDP (United Nations 2 Development Program) INCLUSIVE BUSINESS ADVOCACY UNDP AFIM SUPPORT: Since 2011, Group CEO, Michael Sudarkasa has been a senior consultant supporting the UNDP’s regional Africa private sector development programme – the Africa Facility for Inclusive Markets (www.undp.org/Africa/privatesector) Premise: Africa has had over a decade of jobless growth, to achieve the MDGS and avoid – variations of the “Arab Spring” - more inclusive economic growth Three Levels of Activity: • Macro Level Activity: Helping develop Inclusive Growth Policies • Meso Level Activity: Helping facilitate Inclusive Market Development (sector value chain development/ localisation programme development) • Micro Level Activity: Helping support firm level supplier development (supplier/ distributor development) Tools Used: 1) Good practice knowledge event design and facilitation; 2) Knowledge product creation – 3 Inclusive Business Finance Field Guide; 3) Project and Investment Facilitation Platform facilitation AU/ NEPAD CD SUPPORT NEPAD SUPPORT: Since 2010, ABG has served as an private sector advisor – directly (funded by GIZ) and indirectly (via work with the UNECA) – to NEPAD - with a particular focus on capacity development - for the Regional Economic Communities, in support of public-private partnership development, and in support of private sector policy development at the national government/ legislature level – www.africa-platform.org KEY ACTIVITY • 2010 - Regional Coordinating Mechanism – NEPAD CD Framework Alignment • 2010 – NEPAD SWOT Analysis • 2010 – NEPAD Private Sector/ CSO Engagement Strategy • 2011 – APDev launch and development • 2011 – BUSAN Case Study on India-Brazil-SA (IBSA)/ private sector advisor with NEPAD to Korea • 2011 – 17th Africa Partnership Forum – Private Sector Roundtable coordination • 2012 – APDev Business Plan development • 2013 – RECs CD Community of Practice Support • 2013 – NEPAD/ APDev Co-Facilitator – Global Partnership for Effective Good Development Cooperation e-Discussion on Development Finance: Domestic Resource Mobilization 4 TEN STEPS TOWARD DRM FOR IBD • DMR – Domestic Resource Mobilization • IBD - Inclusive Business Development Premise: Domestic Resource Mobilization gives a nation the freedom to invest and own its development agenda and spend – to make potentially unpopular nationalistic decisions that address key economic development challenges (e.g. subsidies for farmers, procurement/ licensing preferences for local businesses, incentives that support local investors) 1. Improve Tax Administration Efficiency – (collection and management of tax receipts) – Resource: African Tax Administration Forum http://www.ataftax.net/en/ 2. Promote Development and Funding of Domestic NGOs versus “International” NGOs – (build local philanthropic fund management capacity) – Resource: African Grantmakers Network - http://www.africangrantmakersnetwork.org/AGN-Assembly 3. Support Development of Community Foundations – (community designs programmes and administers funds – promotes community reinvestment) – Resource: Global Fund for Community Foundations – http://www.globalfundcommunityfoundations.org 5 TEN STEPS TOWARD DRM FOR IBD (Cont.) • DMR – Domestic Resource Mobilization • IBD - Inclusive Business Development 4. Pension Fund Liberalization – (pass legislation to allow pension funds to allocate investment in infrastructure and private equity/ venture capital funds) – Resource: OECD Working Paper on Insurance and Private Pensions No. 30: Pensions in Africa 5. Support Diaspora Fund/ Bond Development Initiatives– (engage with Diaspora and explore internal and external fund development/ support opportunities) – Resource: Home Strings - http://www.homestrings.com 6. Seek to Leverage Remittance Fund Flows – (explore opportunities to enhance financial architecture to enhance benefit of remittances ) – Resource: African Institute for Remittances (AIR) – http://sendmoneyafrica.worldbank.org/african-institute-remittances-air-project 7. Work to Halt Illicit Fund Flows – ($50 billion a year lost via transfer pricing, corruption, money laundering, tax evasion) – Resource: High Level Panel on Illicit 6 Financial Flows from Africa - http://www.uneca.org/review-mission-hlp-iff-africa-drc TEN STEPS TOWARD DRM FOR IBD (Cont.) • DMR – Domestic Resource Mobilization • IBD - Inclusive Business Development 8. Promote Inclusive Market/ Business Programmes – (pass legislation to require localization requirements and corporate reinvestment to support local private sector growth) – Resource: African Development Bank http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/ 9. Support Development of National Sovereign Wealth Funds – (support the development of a sovereign wealth fund ) – Resource: Sovereign Wealth Fund Institute - http://www.swfinstitute.org/about/ 10. Promote Diaspora FDI / Skills Transfer – ( develop and support legislation, programmes and government department development to incentivize brain gain from returning diasporans, and FDI from Diasporans) – Resource: International Organization for Migration, Migration Policy Institute – http://www.migrationpolicy.org/pubs/thediasporahandbook.pdf 7 HOW CAN WE BE OF ASSISTANCE? Thank You! Mignonne Karugu Africa Business Group The Business Centre at The Design Quarter Fourways, Johannesburg Tel: 27 11 513 4117 or 27 72 786 5010 E-mail: mignonne@abghq.com URL: www.abghq.com 8