Domestic financing plays a crucial role in the revenue collection efforts of developing countries. A high rate of domestic savings provides the necessary resources needed for financial independence, sustained economic growth, and the attainment of the Sustainable Development Goals.
However efforts to increase domestic savings rates have not met with much success in low-income countries, especially in sub-Saharan Africa, in spite of financial liberalization and sound macroeconomic policies. We need to know more about the ways to increase domestic financing in these countries.
During the recent years, there has been limited research taking place on this important topic, in spite of the increasing availability of good quality data. This project will address the following questions:
This research project is conducted in collaboration with the Kenya Institute for Public Policy Research and Analysis (KIPPRA).
All papers, data, outreach products and opportunities to engage relating to this project will be available on this webpage.
Financial inclusion is vital for achieving Sustainable Development Goals (SDGs). Strengthening domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection is a declared target of the UN 2030 Development Agenda (target 17.1). In addition, SDG 16 is dedicated to the promotion of inclusive societies with effective and accountable institutions. Domestic financing capacity is closely linked to the ability of governments to offer better public services to end poverty (SDG 1), reduce inequalities (SDG 10), and ensure sustainable economic growth (SDG 8).
This project is part of the Domestic Revenue Mobilization programme.
Focal point: Kunal Sen
Core researcher: Abrams M.E. Tagem
Project support: Jutta Stenholm
Communications: Anna Toppari
Financial support from the Norwegian Agency for Development Cooperation (Norad)
Contributors and research papers
Domestic resource mobilization has rightly been placed at the centre of the ‘financing for development’ agenda across developing countries. While much is known about the importance of domestic taxes in contributing to this agenda, little is known...
Sub-Saharan Africa (SSA)’s public debt burden remains a challenge to development. Key drivers of public debt include large-scale financing of infrastructure development, adverse impact of multiple shocks including COVID-19 pandemic, maturity...
Sovereign Wealth Funds (SWFs) have become a symbol of national success and a means for global, commercial and geopolitical influence. But how well do...
This note explores the literature on the determinants of foreign direct investment and domestic savings. With respect to foreign direct investment, it argues that institutional quality is the key driver of the type of investment that is necessary for...
Less than 10% of the workers in sub-Saharan Africa save for old age, the lowest rate for any region in the world. That implies most of the...
The recently concluded COP27 in Sharm el-Sheikh had one important outcome for developing countries: the announcement of a loss and damage fund. This...
One essential condition of economic progress in any society is an ample supply of savings, which depends on the growth of real capital.Economists agree that higher investment rates will lead to higher growth. Thus, domestic savings is considered an...
This paper examines the national savings behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with...
This paper examines trends and determinants of gross domestic savings in Tanzania using data for the period 1990–2020. The autoregressive distributed lag approach is employed to empirically analyse the short-run and long-run relationships. There has...
Do sovereign wealth funds (SWFs) contribute to Africa’s development? This paper assesses the objectives of SWFs (fiscal stabilization, productive investment, intergenerational saving) and discusses alternatives. We argue that fiscal stabilization...
Financial technology (FinTech) is a major force disrupting the structure of financial services in sub-Saharan Africa (SSA) and enabling access of...
The savings–growth nexus is widely acknowledged, both in policy and in the literature. But Kenya’s numerous policy initiatives to encourage savings mobilization are yet to yield the expected outcomes. This paper identifies the key drivers of domestic...
Capital markets facilitate capital growth by mobilizing savings and converting them into investments, and they are therefore a stimulant of economic growth. There is evidence that countries with high savings rates tend to grow faster. Although most...
This paper traces the development of fintech in sub-Saharan Africa, its evolution over time, and the unfolding benefits attained at each stage of its adoption and market evolution. From the onset, fintechs have revolutionized retail electronic...
Theme: 2019-23, Transforming states
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