In his lecture delivered at the IEA, Kwakye said that Africa should adopt alternative means of mobilising development resources instead of depending on aid that has rather caused stagnation of her development.
Africa needs to break the aid dependency syndrome as in most cases aid is heavily insufficient and surrounded by uncertainties and volatility, he explained, thereby resulting in the stagnation of development especially in low income African countries.
Kwakye suggested that governments use the budget as their first vehicle to mobilise resources for national development, which, he said, demands both revenue and expenditure measures.
“On revenue side, there is the room to broaden the tax base by roping into the tax net, informal operators and the self-employed, reducing exemptions, and enforcing compliance, while on expenditure we need to prioritise by curtailing non-essential spending to create space for priority spending.”
Speaking on “Overcoming Africa’s Addiction to Foreign Aid through Some Financial Engineering”, Kwakye also suggested that domestic capital markets be used to provide long- term funding for budgeting and developmental activities in key sectors of the economy, including health, education, roads, railways, ports, telecommunication, water and energy.
“Bonds could be issued by governments, municipalities and the private sector,” he urged, adding that appropriate institutional infrastructure and legal framework with a stable macro-economic and political environment should also be developed and maintained for this purpose.
Kwakye also believes that remittances from the large population of Africans living abroad are large potential sources of funding for development back home.
Measures such as offering attractive terms through the reduction of charges and also reciprocal bilateral arrangements with source countries could be used to maximise remittances, he pointed out.
He advocated for the development of floating bonds purposely targeting Africans living in the Diaspora and the forward-trading of future foreign exchange inflows from resources such as oil, gold, cocoa, tourism and among others.
On his part, the deputy Trade minister, Mr Joseph Annan, said that Africa’s future was bright as current developments in the western economies had positioned the continent as the alternative investor destination.
“Our hotels are full, with foreign investors who are not here for tourism but for investment opportunities.”
He observed that the flow of foreign direct investment was picking up he believed, was what Africa needed for development.
“Let us envisage not only Ghana but Africa without aid, but with FDI,” Annan called.