The increasing gap in humanitarian financing and the urgency to address global public goods is leading to a shift away from long-term investments and to a fragmentation of development financing. This session showcased country-led responses to this fragmentation and urged stakeholders to strengthen the catalytic role of development co-operation and the coherence and synergies of financing instruments.
Key Messages from the Session
- Development co-operation plays a critical role in both increasing available development financing (quantity) as well as ensuring it is being used effectively where it matters most (quality). This calls for all stakeholders to accelerate efforts for the implementation of the SDGs in more coordinated and accountable approaches that limit further proliferation of finance providers and fragmentation of development activities as well as support inclusive, whole-of-society ownership.
- Integrated National Financing Frameworks (INFFs) are one of the existing tools to limit fragmentation and strengthen such inclusive, whole-of-society ownership. Country examples illustrated how development co-operation actors can design the INFFs in close dialogue with national authorities at the highest political level towards developing sustainable financing strategies for partner countries’ development visions.
- Partner countries are leveraging a wide range of private actors and innovative financing mechanisms, including diaspora bonds, SDG bonds, Sukuk, private philanthropy and others to diversify their development finance portfolio. There were strong calls for applying the effectiveness principles across these new actors, instruments and modalities, including by working more closely with civil society organisations to ensure public scrutiny and accountability of how concessional public finance is being used to leverage private finance.
Links to Relevant Resources/Products
- Concept Note (ENG, FR, ES)
- Addis Ababa Action Agenda - United Nations
- Integrated National Financing Frameworks
- Understanding Trends in Proliferation and Fragmentation for Aid Effectiveness During Crises – World Bank
- Financing for Sustainable Development Report 2022 – UN Inter-agency Task Force on Financing for Development
- Financing for development: Mobilizing sustainable development finance beyond COVID-19 - UNCTAD
- Global Outlook on Financing for Sustainable Development 2023 - OECD
- Multilateral Development Finance 2022 - OECD
Key Terms: Development finance, accountability, transparency