Foreign direct investment (FDI) is diversifying away from mineral resources into consumer goods and services and is increasingly targeting large urban centres in response to demand among a growing middle class. African sovereign borrowing is rocketing. Remittances have increased six-fold since 2000 and are projected to reach $64.6 billion in 2015 with Egypt and Nigeria receiving the bulk of flows. Conversely, official development assistance (ODA) will decline in 2015 to $54.9 billion and is projected to diminish further. More than two-thirds of states in sub-Saharan Africa, the majority of which are low-income countries, will receive less aid in 2017 than in 2014. Despite significant improvements in tax revenue collection over the last decade, domestic resource mobilisation remains low. Financing the post-2015 development goals will depend on the capacity of African policymakers and the international community to harness these diverse funding options and exploit their potential to leverage additional finance.
©OECD Observer Special offprint, July 2015