Opinion: Development, potholes and fiscal discipline

It is a conference where ambition was allowed to run wild - from goals ranging from "ending poverty and hunger, and to achieve sustainable development" to drumming up a $4 trillion (3.7 trillion Euros) a year budget to finance the sustainable development goals (SDGs). But does Africa really need development financing?

Yes! I live in a country where for as long as I can remember, there were potholes on the roads. These things were huge! In fact people at times called them craters. Then through financing from the African Development Bank and the Export Import Bank of China, Kenya was finally able to construct super highways, some forty years after gaining independence.

Development financing does have its place. The difficult reality is that Africa is still unable to support her development agenda. In the east African economies for example, only Rwanda has allocated more than 30% of its budget to development. The bulk of the money made in the region is going into recurrent expenditure: paying unsustainable wage bills (and buying expensive choppers). So without money, borrowed or not, to drive development, these young economies risk stagnating. But at what cost?

The cost is $4 trillion a year - if you are looking at the UN budget - and naturally more debt for the economies in need of this financing. The problem with debt in the developing world is that over the decades it has become malignant. Countries like Kenya are using concessionary loans such as the sovereign bond to service dollar-dominated debt that was accrued by previous regimes - and we still need the new credit we are piling on.

Unfortunately, borrowing domestically has traditionally been more expensive and what is more, there isn't enough money from the domestic sources. Major leakages, corruption, rising inflation and poor public financial management mean that for most countries south of the Sahara, budget deficits are a normal feature. The development projects needed to spur growth cost money and for Kenya to fund one of her most ambitious projects, The Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) corridor, the country would need a sum total of its national budget.

While we currently cannot divorce development financing from the growth of developing economies , it is important for African governments to consider things such as fiscal discipline. We don't need twenty luxury, fuel guzzling cars for our presidential motorcades, for example. A change in government procurement policy is also necessary across the region to ensure efficient and timely absorption of resources. Continuity of policy from different regimes is also vital to stop the current trend of financing ambitious political manifestos that are designed to win elections and not sustainable development.