In the aftermath of the COVID-19 pandemic, domestic resource mobilization in Africa faced unprecedented pressures from lockdowns and other restrictive measures. The dual impact of pandemic-related financing and falling government revenue has led to diminished fiscal spaces in many countries on the continent. In the external context, resource mobilization for development witnessed a major setback as donor countries pivoted to prioritize domestic needs and focus on ongoing challenges related to the pandemic.

Even before the pandemic, low commodity prices, high debt levels, low levels of domestic savings, and weak private capital were a drag on GDP growth across several African economies. With both domestic and external financing drying up in the face of the pandemic, and its aftermath, existing unmet financing needs for the SDGs in Africa will be further exacerbated. Given high debt levels and limited fiscal space in several countries on the continent, financing needs must be aligned with available pools of domestic and external capital.

Lessons from past crises show that African policymakers can weather the storm and rebuild more resilient economies across the continent. To ensure the current crisis does not erase years of development gains, and that African countries are more resilient to future crises, it is important to rethink and reconfigure current private, public, domestic, and external financing sources under a forward-looking framework.