Financing the suistainable development goals in fragile states of liberia

FINANCIN

G THE SUSTAINABLE

DEVELOPMENT GOALS IN

FRAGILE STATES: LIB

ERIA IN

CONTEXT

A LO BO GABR I E

L I GBO

F I NANC I N

G FOR D

EV E LO PMEN T

COURS E FI N

A L PRO J E

C T MAR CH 2

0 1 7

WELCOME TO LIBERIA

INTRODUCTION

Liberia is a country in the Western region of Africa with a population of about 4.5 million people bordered by Guinea in the North, Cote d’Ivoire in the East and Sierra Leone on the West with a land mass of 111,369. Liberia is one of the oldest independent country in Africa. Various civil unrest beginning in 1979 followed by the coup of Samuel Doe, assassination of President William Tubman. subsequent civil war and other multiple upheavals led to the country being designated a fragile state. Although peace has returned with the entrenchment of democracy, this classification has not changed since then.

The health care which is highly dependent on donors is manned by about 5000 staff and 51 doctors giving a ratio of 1:76000 doctor population relationship. On January 26th 2016, the President launched the SDG with plans to prioritize SDGs 3 (health), SDG 4 (education), SDG 5 (gender equality), SDG 6 (clean water and sanitation), SDG 9 (infrastructure), SDG 16 (peace and justice) and SDG 17.

INTRODUCTION CONTINUE

L I B E R I A M A PL I B E R I A C O U N T R Y P R O F I L E

Total population (2015) 4,503,000Gross national income per capita (PPP international $, 2013)

790

Life expectancy at birth m/f (years, 2015) 60/63

Probability of dying between 15 and 60 years m/f (per 1 000 population, 2015)

285/232

Total expenditure on health per capita (Intl $, 2014)

98

Total expenditure on health as % of GDP (2014) 10.0

Latest data available from the Global Health Observatory

INTRODUCTION CONTINUE

SUSTAINABLE DEVELOPMENT GOALS

Introduction to Fragile States

A fragile state is a low-income country characterized by weak state capacity and/or weak state legitimacy leaving citizens vulnerable to a range of shocks. The opposite of a "fragile state" is a "stable state" – one where dominant or statutory institutional arrangements appear able to withstand internal and external shocks and contestation remains within the boundaries of reigning institutional arrangements.• post-conflict/crisis or political transition situations• deteriorating governance environments• situations of gradual improvement • situations of prolonged crisis or impasse

(Wikipedia)

FRAGILE STATE PECULIARITIES

• Mixtures of opportunities and challenges • Weak system with low resilience• Widespread inequality • Donors preferences for government with some structures on

ground• Proven approaches targets vulnerable groups, social

protection, Peace Agreement, political settlement, managing refugees and mass migrations, food security and employment

ACHIEVING THE SDG IN LIBERIA

Strategies:1. Coordination between Government Ministries

and Agencies and Harmonization of Authorities;2. Implementation of Legal and Social Reforms 3. Land Rights, Tenure, and Administration 4. Human and Institutional Capacity Building5. Enforcement and Compliance in Extractive

Industries.

LIBERIA TRENDS IN GDP.

SCHOOL ENROLMENT.

LIBERIA CORRUPTION RANK.

FINANCING THE SDG: DOMESTIC RESOURCE MOBILIZATION

Challenges: Low savings, capital flight, corruption, high tax, tax incentives and exemptions, paradox of plenty (Rich minerals countries have poor governance), Pareto principles of taxation, weak organizations/administrations

Income generation: Liberia is blessed with many human and material resources with potential for savings that could be used for social services and mitigate the perpetual dependence on aids. Liberia generates most of her income from maritime iron ore, rubber amongst others. Generating over $600M from DRM has been the target of the Sirleaf Administration. Liberia is eligible for trade concessions under the United States 'African growth and Opportunity Acts (AGOA). Major export to United States are wood, art, antiquities, palm oil and diamonds under AGOA

Regional Integration: Liberia currently head the regional block of the Economic Community of West African States (ECOWAS). This could be a moment where the Sirleaf Administration could leave imprints in the sand of times by increasing regional trade which currently stands at a paltry 10.8% (2015) of total export

Investment in infrastructures: State infrastructural decay and fragility is high due to years of unrest. Despite the economic implication of the infrastructure paradox, Liberia stands to gain in infrastructural investment. The longstanding Liberian status of “growth without development” is being changed towards one of “prosperity with fairness.” (ministry of finance). Opening up feeder roads and rural infrastructures (transport, power , Information Technology, mining , agro business, Concessions etc)Broadening the taxation base and administration could increase substantially the current tax to GDP ratio from the current 18.5%

Others : financial risk management, debt management, use of newer financial tools

Reduction in debt: debt to GDP ratio currently stands at 24%

ROLE OF OFFICIAL DEVELOPMENT ASSISTANCEThe annual investment gap in developing countries in key SDG sectors stands at $2.5 trillion, which is only partially bridged by current levels of private sector investment amounting to $900 billion.  The remaining $1.6 trillion would need to be covered by some combination of increases in public sector budgets, official development assistance (ODA), and new investments from the private sector.  Aids to account for less than 9% of the funding. Nearly 90% of the $1.6 trillion needs to come from national government budgets. Three SDG goals received the most aid: health, sustainable cities and reduced inequalities. Apart from Aids, Liberia stands to benefit from ODAs in the following:

1. Policy

2. Tracking and monitoring performance of SDGs

3. Promoting investment in sustainable development

4. Supporting inclusive growth and well-being

5. Capacity building

PRIVATE SECTORS Role of billions to trillions and Blended financing With the strong contributions of Multlateral Development Banks, Liberia has positioned her private sector for greater

growth. It has jumped several points at the Global Ease of doing business ranking. Private Sector could finance the SDG in Liberia through: Broad based Pro-Poor Partnerships with other economic development agencies in the country i.e. UNDP, UNIDO,

ILO, IFC, IMF, World Bank, USAID etc. Attraction of investments especially Foreign Direct Investment (FDI) including the creation of investment

incentives Creation of microfinance/inclusive finance policy and enabling SME development policies including their

regulation Decentralization of economic activities. outward growth strategies including export oriented SME’s, Partnership: (Public and Private Partnerships).in the development of agro-manufacturing industries through

agricultural incubators.

Incorporation of gender in development activities Absorption of internally displaced people and ex-combatants in productive sectors of the economy.   Review of collage curriculum to enable collages provide the needed skills for the job market

CONCLUSIONSThe SDG is attainable in Liberia. The stable democracy , abundant resources, plans for regional integration, policy thrust, taxation, and AGOA are potentials for huge Domestic Resource Mobilization that could ultimately finance the SDG. The overwhelming interest of ODA could further drive financing, policy and tracking of achievements.

THANK YOU

References 1. Financing the SDGs in the Least Developed Countries (LDCs): Diversifying the Financing Tool-box and

Managing Vulnerability. 2016. UNDP & AFD May, 2016.

2. Government of the Republic of Liberia; Ministry of Foreign Affairs

3. Liberia". the U.S. Agency for International Development. Retrieved 15 May 2013.

4. Liberia: MSF Hands Over Hospitals to Ministry of Health.". Doctors Without Borders. Retrieved 29th March 2017.

5. Fragile states in Wikipedia: accessed March 28th, 2017

6. Taxation And Aid For Domestic Resource Mobilization (D.R.M.) Aid: Helping Or Harming Domestic Resource Mobilization In Africa: https://www.oecd.org/site/devaeo10/44272298.pdf

7. Crowding in funding for the sdgs: reflections on the missing development trillions. AidData http://aiddata.org/blog/crowding-in-funding-for-the-sdgs-reflections-on-the-missing-development-trillions

8. . Michael Fallavius Fayiah . Private Sector Dev. Key to Sustainable Peace in Liberia. The New Dawn