ODA Cuts: UN tasks Nigeria on embracing domestic, private sector funding

ODA Cuts: UN tasks Nigeria on embracing domestic, private sector funding

…says $17bn annual illicit financial flow loss would have made impact

By: Michael Mike

The United Nations has advised Nigeria to adopt an alternative model of funding to drive its economy, following the Official Development Assistance (ODA) cuts from major donors to poor and developing countries.

The United Nations Resident and Humanitarian Coordinator in Nigeria, Mohamed Fall who gave the advise on Monday at a press briefing organised ahead of the United Nations, Co-convener of the forthcoming 2025 Africa Social Impact Summit (ASIS) holding next month, advised Nigeria to explore domestic resources from the state and the private sector.

He said: “We are entering a new era where ODA, where development financing, where humanitarian financing will never be the way it has been for the past decade.

“This is why we think that it is time for us to focus on what kind of alternative model is the most viable for financing development in context like the one of Nigeria. And today financing development cannot find any other source than the domestic resources.”

As Co- Convener of this year’s ASIS, the UN official noted that, “This summit is taking place at a time where we really need to pull together our effort, our reflection and see which direction we need to take to make sure that private sector comes to the development financing not only as a charity or not only as a corporate social responsibility, but as an investment for development with a shared value and a shared understanding that any investment or any gain you make in development is going to benefit the private sector, to the shared value or the win-win concept of the partnership.”

Fall who made emphasis on the $17 billion Nigeria loses through illicit financial flows annually, noted that it would have made meaningful contribution to the nation’s development.

He said: “If you compare how much Africa get in ODA to how much Africa loses when it comes to illicit financial flow or any other financial flows that take capital out of the continent, you can agree that what we receive in ODA is maybe five, six, seven times less than the money we lose into those kinds of mechanisms.

“If I take the case of illicit financial flow, people say that the African continent will lose up to maybe $90 billion through illicit financial flow.

“Nigeria alone loses 20% of those $90 billion. It means what? It means around $17 billion a year lost through illicit flow. If that one was converted into development, it could represent up to 50% of what the state is spending annually, including for the debt service recovery.

“This is why we want this to be a forum of deliberation, exchanging ideas, identifying opportunity, to go beyond the narrative to an action.

“We want the forum to go beyond the rhetoric to an implementation of plan where we see truly how private sector can help to drive the development agenda, not only based on the charitable spirit that the private sector or the capital of industry can have, but by their own interest that when they develop the sector or when development takes place, it’s first and foremost for the benefit of their own business.”

Managing Director and CEO, Sterling Bank PLC, Abubakar Suleiman while stressing the importance of partnering with the UN on ASIS, said the private sector in Nigeria must engage in activities that would generate both financial and social values to the country.

He said: “And we asked ourselves, who could possibly help us achieve this objective? Who could call and every serious-minded person who is interested in solving Nigeria’s problem would show up? And there’s no better candidate for that than the UN.

“We need to create a culture where those of us that are profitable and make money working in Nigeria do more. Not just for the sake of the media, but do more to change the fabric of the country itself, not through charity, but by developing programmes and products that put money where it can create value.

“There is a crisis that needs to be solved and that this is probably our biggest opportunity to come together towards solving that.

“This is the platform. And I want to commit on behalf of Sterling Bank that we will continue to raise the standard. We will continue to push so that it’s not just a one-man war.”

Suleiman further charged the private sector to step up and bridge the resources gap occasioned by ODA saying, “The days where we can count on resources coming from across the border to solve our problem, they’re over. It may have started slow, but I think it is time now. We’re going to have to face the fact that there will be no international resources that will be sufficient enough to solve our problem. This particular summit, more than ever, should be a very sobering one.

“Nigeria is a country that does not collect a lot of taxes and whatever is not collected in taxes is in the pocket of the private sector so as long as the private sector controls more than 80 percent of the resources of this country, they have an obligation to bring those resources to bear in solving social problems.

“We need to make it a clear obligation until the government of this country can collect 30 percent, 35 percent of the GDP in taxes and have the power to do big stuff, we in the private sector must step up.”

Chief Executive Officer, Sterling One Foundation, Olapeju Ibekwe explained that this year’s Summit themed “Scaling Action: Bold Solutions for Climate Resilience and Policy Innovations” was a reminder everyone must “put their hands on the plow and whatever they have been doing before, now is the time for us to accelerate. 2030 is closer to us than when we first knew about it.

“This is an execution platform for people to work together. We seek to achieve three major objectives: effective partnerships; impact investments into scalable, viable solutions; and policy advocacy. We are proud to confirm that we have started all of this. And this year, we are looking to scale action,” she said.

ODA Cuts: UN tasks Nigeria on embracing domestic, private sector funding