“We have made some progress, but the achievement of the Sustainable Development Goals is in peril. Progress on most of the goals is either moving too slowly or has regressed below the 2015 baseline. Years of sustainable development gains are being reversed. Poverty and hunger have increased and inequalities have widened. Human rights are under threat, and we run the risk of leaving millions of people behind. Climate change, biodiversity loss, desertification and sand and dust storms and pollution pose immense risks to our natural environment and our prospects for development.” – Pact for the Future!

Introduction:

The Fourth Global Conference on Financing for Development, to be held in Seville, Spain, in July 2025, will review progress made and identify actionable outcomes against the backdrop of a damning assessment that not only shows that the achievement of the SDGs is in peril, but also a regression below the 2015 baseline!

Undoubtedly, international financial cooperation is a crucial in achieving global development goals, particularly in the context of  the Sustainable Development Goals (SDGs). Increased domestic and international financing is critical for addressing poverty eradication, inequality, climate change and environmental degradation and all forms of human insecurity.

This brief reviews the key frameworks of international financial cooperation, the outcomes of previous global conferences, and addresses key issues such as debt, domestic resource mobilization, and the reform of international financial architecture and mutual accountability. It explores why increased aid and financial volumes have not achieved the desired development outcomes and considers the prospects that, unless significant changes are made, the fourth Financing for Development Conference may not be more successful than the three previous conferences. It recommends a shift from inordinate focus on increasing aid volumes to prioritizing results and development effectiveness.

1. Background: International Cooperation Frameworks

Several international frameworks designed to ensure development effectiveness have guided development cooperation over the past two decades, including mutual accountability, country ownership, and harmonization between donor and recipient nations. Below is an overview of the key frameworks that have guided these efforts:

1. The Paris Declaration (2005)

The Paris Declaration on Aid Effectiveness was, in many ways, a crucial shift in development cooperation and partnerships. It focused on country ownership, alignment, harmonization, managing for results, and mutual accountability. It aimed to improve the quality of aid by strengthening relationships between donor and recipient countries, in alignment with the development agenda of recipient countries.

2. The Accra Agenda for Action (2008)

Building on the Paris Declaration, the Accra Agenda for Action (AAA) was adopted in 2008 to address the challenges and limitations that stood in the way of full implementation of Paris’ principles. It called for the greater inclusiveness: civil society, local governments, and emerging economies. The AAA emphasized the importance of transparency and accountability and taking into account the unique needs of fragile and conflict-affected states.

3. The Busan Partnership for Effective Development Cooperation (2011)

The Busan Partnership Agreement was a more inclusive framework than the AAA, by integrating traditional donors, emerging economies, private sector actors, and civil society organizations. It reinforced the importance of country ownership and placed a stronger emphasis on partnerships to improve aid effectiveness. Busan also emphasized a stronger focus on results and mutual accountability. Like the AAA countries must strengthen their institutions to achieve sustainable development.

4. Mutual Review of Development Effectiveness (MRDE)

The Mutual Review of Development Effectiveness (MRDE) is an African-led (UN Economic Commission for Africa as the lead agency) initiative conducted in partnership with the Organisation for Economic Co-operation and Development (OECD). Its core objective is to assess progress on development commitments made by African countries and their development partners. MRDE is a tool for enhancing mutual accountability and transparency, focusing on areas such as governance, economic growth, and development financing leading ultimately to development effectiveness.

1. Review of the Previous Global Conferences on Financing for Development: Lessons Learned
2. Monterrey Conference (2002)

The Monterrey Consensus, adopted at the first Global Conference on Financing for Development in 2002, marked a landmark agreement on financing for development. It recognized the need for a holistic approach, that integrates international aid, trade, debt relief, and domestic resource mobilization. The conference emphasized the role of the private sector and proposed reforms to the international financial system.

Successes:

• Monterrey laid the foundation for global recognition of development financing.
• Countries agreed to increase official development assistance (ODA) to 0.7% of Gross National Income (GNI) for developed nations.

Failures:

• Limited progress on implementing the ODA commitments.
• Monterrey’s call for reforms in international financial governance faced resistance.

3. Addis Ababa Conference (2015)

The Addis Ababa Action Agenda (AAAA) was adopted at the third Global Conference on Financing for Development. It set an ambitious framework for financing the SDGs and outlined the importance of domestic resource mobilization, international public finance, and private sector investment. The agenda also emphasized the need for reforms in the international financial architecture.

Successes:

• Addis Ababa advanced the dialogue on domestic resource mobilization and innovative financing mechanisms.
• The agenda encouraged greater partnerships with the private sector to address financing gaps for the SDGs.

Failures:

• Many developing countries faced difficulties in accessing the necessary resources, particularly in the face of growing debt burdens.
• Despite commitments, progress on reforms to the international financial system has been slow to action.

III. Key Issues for the Fourth Global Conference

1. Action-Oriented Outcomes

To avoid the shortcomings of previous conferences, the Fourth Global Conference must prioritize actionable and impactful outcomes. Clear timelines and accountability mechanisms should be established to ensure that commitments are met. A focus on concrete, measurable results—such as setting up sustainable financing mechanisms for critical sectors like education, health, and infrastructure will be essential to address the shortcomings of the previous three conferences.

2. Addressing the Debt Issue and Access to Finance

The growing debt burdens of developing nations pose a significant threat to sustainable development. Accordingly, the conference must focus on:

• Debt relief initiatives: Expanding debt restructuring and relief mechanisms for heavily indebted poor countries (HIPCs) and middle-income nations.
• Access to finance: Improving access to international capital markets and encouraging concessional finance for low-income countries.

3. Governance as a Pillar of Aid Effectiveness: Building Strong Institutions

Commitment and adherence to good governance and building strong institutions are fundamental for achieving the SDGs and ensuring effective domestic resource mobilization. The conference should:

• Encourage and support countries to strengthen governance and transparency in public finance management.
• Support capacity-building efforts to enhance institutional effectiveness in tax collection and anti-corruption measures.
• Strengthening governance and institutional capacity in recipient countries is essential for maximizing the impact of aid. Weak Governance can lead to inefficiencies and corruption, undermining development objectives. Aid must be coupled with efforts to strengthen public financial management, anti-corruption measures and accountability systems. Good governance enhances aid absorption and ensures that resources are directed toward sustainable development. It also ensures that tax payers in donor countries get value for money. This also staves off the political pressure in many donor countries to end or severely curtail development assistance because of the failure to see significant development effectiveness. Whether this is a canard for the political right who have traditionally been opposed to aid or not the policy implications and the future of ODAs should be taken seriously!

4. Tackling Illicit Financial Flows and Corruption

Illicit financial flows (IFFs) undermine development by draining resources from developing nations. The conference must:

• Establish and streghten stronger international cooperation to combat IFFs, including improved regulations on tax evasion and money laundering.
• Enhance global transparency standards and support the exchange of tax information.

5. Reform of the International Financial Architecture

It is impactful to heed the growing consensus that the current international financial system needs to be more inclusive and responsive to the needs of developing countries. The two key areas of focus include:

• Greater voice for developing countries in institutions such as the International Monetary Fund (IMF) and World Bank.
• Reforming global trade rules to ensure fairer access for developing nations.

6. Strengthening Mutual Accountability

Effective and efficient international development cooperation depends on mutual accountability. This can be achieved by:

• Strengthening the monitoring of development commitments through international platforms such as the OECD and United Nations to ensure that both sides are living up to their commitments
• Encouraging greater transparency in both donor and recipient countries on how aid is dispensed, utilized and whether aid is leading to measurable and impactful development outcomes.

Conclusion: Key Imperatives.  

 A lot of the recipient countries that will be the focus of the Fourth Financing for Development Conference are already subject to a few challenges that have affected domestic and foreign resources, and more importantly, development effectiveness. These countries are inevitably commodity-dependent economies, which face peculiar, and structural vulnerabilities, price volatility and governance issues in resources management. The following actions will be needed to address these challenges and must be factored in the deliberations of the upcoming conference:

• Diversification of their economies beyond natural resource exports as well as value addition/beneficiation to reduce vulnerability to price fluctuations. This is an imperative for domestic resource mobilization.
• Sustainable Management of Resource Revenues: Support mechanisms like sovereign wealth funds to ensure transparent and long-term use of resource revenues for development effectiveness.
• Governance in the Extractive Sector: Strengthen governance frameworks and economic management in line with AAA and Busan Agreement to ensure that resource wealth contributes to broader development goals.
•  Good Governance for Development Effectiveness

Good governance is a sine qua non for aid effectiveness. Efforts to promote good governance, transparency and strong institutions in both donor and recipient countries must be a critical area of focus at the conference. The key to achieving development effectiveness is not only how much aid is raised or given but in ensuring that recipient countries have the governance structures to manage and utilize aid effectively. A combination of financial support, governance reforms and accountability measures is essential for long-term success.

By
Professor Okey Onyejekwe
Executive Secretary
ACGEM