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Capacity weaknesses represent the most significant challenge to DRM

This data is from the preliminary findings of the upcoming 2015 Africa Capacity Report. Domestic Resource Mobilization (DRM) means both the mobilization and efficient utilization of resources.
Capacity, in its various dimensions, is still a problem for the continent not just for DRM. ACBF’s Africa Capacity Index (ACI) 2015 shows that the bulk of African countries have  medium capacity (73.3) with only 17.8 percent in the High bracket, while 8.9 percent are in the Low bracket. The ACI measures policy environment, processes of implementation, development results at country level and capacity development outcomes.
Countries have acute capacity needs for scaling-up DRM. Results show that almost all areas for ensuring effective and sustainable DRM face high capacity constraints.
Acuteness of capacity needs for DRM
Area of capacity needs Very Low Low Medium High Very High  
Fighting Illicit financial flows 6.8 13.6 22.7 40.9 15.9  
Revenue collection 2.3 13.6 31.8 38.6 13.6  
Fiscal sustainability 2.3 7.0 44.2 46.5    
Financial sector strengthening   4.7 48.8 41.9 4.7  
Fighting corruption 4.6 11.4 29.6 38.6    
Social security and safety nets 4.7 25.6 30.2 34.9 4.7  
Institutional and human capacity imperatives for scaling-up DRM. In addition to the rules and regulations, the capacity of institutions in the DRM chain must be reinforced to increase DRM. Rules and regulations encompasses sound public financial management which is integral to the process of improving DRM and ensuring that domestic resources are used to ensure inclusive and sustainable development. Besides, it is important to:
  1. have legal system reforms aimed at law reform, especially where the laws are inadequate, or poorly functioning;
  2. reduce crime and criminal activities of all kinds;
  3. undertake reforms in the areas of taxation, banking and capital markets;
  4. have flexible yet effective laws and regulations to access non-traditional sources of finance and curb IFFs and
  5. work more on tax reforms that will ensure tax harmonization and a move away from tax exemptions, concessions and holidays

Beside the rules, regulations and building of the required human capacity, it is imperative to build the capacity of key continental, regional and national institutions to increase DRM:

  • The African Union Commission and its organs (especially those dealing with legal, audit, tax and parliament related issues)
  • The specialized institutions such as the ACBF, the African Development Bank (AfDB), the African Tax Administration Forum (ATAF), the Collaborative Africa Budget Reform Initiative (CABRI) and the UN Economic Commission for Africa (ECA)
  • Regional Economic Communities (RECs), specially the AU-recognized ones which will play a great role at the regional level in the DRM chain
  • National tax administration and revenue authorities.

Need to foster visionary leadership, change mindset and address other soft capacities. A key element for successful DRM starts with an effective and visionary, committed and accountable leadership that sets the right tone at the top. While there is need for positive social norms, values and practices conducive to DRM, the ability and willingness to learn from experience is equally important. 

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Thomas Kwesi Quartey

ACBF has been granted the status of a specialized agency because of the potential to transform Africa through capacity development.

H.E. Thomas Kwesi Quartey, Deputy Chairperson, AU Commission
Erastus Mwencha

The recognition of ACBF as the African Union’s Specialized Agency for Capacity Development launches the beginning of a new era for capacity building by ACBF, which will require an appropriate level of political commitment and financial support from all stakeholders.

H.E. Erastus Mwencha, Chair, ACBF Executive Board
Lamin Momodou

The remarkable achievements ACBF has registered over the past 26 years is not by accident in our opinion. They have come through hard work, dedication, commitment, purposeful leadership, support from the member countries as well as productive partnership building.

Mr. Lamin Momodou MANNEH, Director, UNDP Regional Service Centre for Africa
Goodall Gondwe

Africa needs ACBF as much, probably more now, than at the time it was created in 1991.

Hon. Goodall Gondwe, former Chair of the ACBF Board of Governors and Minister of Finance – Malawi
Ken Ofori Atta

Ghana’s partnership with ACBF is a tremendous blessing for us and therefore the opportunity for Ghana to host the 26th ACBF Board of Governors Meeting is something that we treasure.

Hon Ken Ofori Atta, Chair of the ACBF Board of Governors and Minister of Finance - Ghana