Financing Development by Leveraging the International Telephone Trafic, Through the Model Created by Global Voice Group

Cape Town, December 3, 2015 (Newswire.com) - Developing countries can count on innovating financing to reach the SDGs by 2030

The Millennium Development Goals (MDGs) will end at the same time as 2015. Even though some developing countries have intensified their efforts during the past few years, in a bid to reach the MDGs, the results obtained by most of them remain mixed. The new Sustainable Development Goals (SDGs), which have been adopted by the UN’s member States in New York at the end of September and which will become effective on 1 January 2016, will require even more efforts, discipline and innovation from the countries concerned for the next 15 years. The 17 SDGs replace the 8 MDGs that were adopted in 2000.

In the context of this new framework, all eyes are now on the African continent, which counts 33 of the 49 least developed countries. The fact that Addis-Ababa was selected as the host of the conference on development financing that was held last July confirms that Africa increasingly finds itself at the heart of this discussion. How will developing countries, and especially those on the African continent, be able to successfully meet the SDGs, after having failed to reach most of the MDGs, while the levels of official development assistance keep on dwindling?

Although the international community has committed to covering the costs linked to the SDGs – which amount to US$3 000 billion per year – through the official development assistance, it also requires that this responsibility be shared. As a result, for the next 15 years, southern countries will have to mobilize their national resources, while fighting against tax evasion and implementing more flexible and more efficient tax collection systems.

Rich countries thus wish to unlock new resources through both private financing and the domestic revenues of developing countries, rather than through an increase in the official development assistance. In 2002, the developed countries had committed to allocating 0.7% of their GNP to official development assistance. Thirteen years later, the United Nations have noted and deplored that this promise has mostly not been respected.

The World Bank (WB) reports that one and a half billion people still do not have electricity, 870 million suffer from malnutrition and 780 million still do not have access to drinking water. Therefore, for the WB, sustainable development involves acknowledging the fact that growth must be both inclusive and environmentally friendly in order to reduce poverty, promote prosperity for all and meet the needs of future generations.

The three pillars of sustainable development – economic growth, environmental management and social inclusion – relate to all aspects of development: rapid urbanization, agriculture, infrastructure, energy use and production, water and transport. These challenges may remain insurmountable if developing countries decide to hold on to the meagre resources currently generated by their tax administration to finance their development. They would be well-advised to broaden the range of available solutions and perspectives, specifically by resorting to the innovative financing mechanisms which, for more than a decade and mostly through Global Voice Group’s (http://www.globalvoicegroup.com) technical interventions in many African countries, has consistently yielded tangible results.

The 54 African countries, which receive more than 36 billion minutes of international telecommunications, according to the most recent estimations, could generate more than 1.8 billion dollars each year thanks to a micro-surcharge of US$0.05 per minute. This micro-surcharge constitutes Global Voice Group’s innovative financing model based on the international telephone traffic. By mobilizing such a source of additional revenue, these countries will be able to finance the sustainable development goal of their choice.

For example, calculations published by the Education for All Global Monitoring Report (Universal primary schooling then being the second MDG) revealed that, since 2012, the annual external financing gap in connection with the goal to offer basic education in low-income countries – which is equivalent to US$16 billion – increased to reach a total of US$26 billion in 2015.

Three years before the end of the MDGs, UNESCO was already encouraging developing countries to find new ways to generate additional revenue, to manage their natural resources more efficiently and to allocate part of these revenues to education.

The improvement of the tax systems – which could reduce the gap by US$7.3 billion – and the allocation of 5% of the taxation project on international financial transactions to education – which would allow for the mobilization of US$2.4 billion – are two of the options considered to bridge the gap that has been preventing low-income countries from achieving the objective of offering basic education to all.   The funds collected from the micro-surcharge on international calls to the African continent, which could amount to nearly US$30 billion by 2030, could complement these options.

Even though many low-income have not been able to fully achieve the second MDG, the leaders of these countries have committed to providing their citizens with an all-inclusive quality education by 2030 and to promoting lifelong learning opportunities. 

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