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Southern Africa Trust |

Financial Transaction Levy and Creation of Fiscal Space to Enable SADC Finance its Regional Programmes

Civil Society

Since its inception, most of the activities of the Southern African Development Community (SADC) have been implemented using resources from SADC Member States and from Development Partners. This model of funding has not worked well for SADC as it has contributed to most of the activities not being implemented. The situation has worsened over time with the increase of regional activities. For instance in the next five years it is expected that SADC will require approximately US$260 million to fund its regional projects (i.e., coordination of activities, studies, capacity building initiatives as well as consensus meetings). The community will also need US$64 billion to fund regional infrastructure projects. From the total amount of US$64.3 billion required to fund SADC regional projects and activities, only US$43.2 million is currently committed to this budget, and this translates to a financing gap of 99.3%. Furthermore, commitments from Member States and from Development Partners indicate a huge disparity, with only 9.2% of regional projects being funded by Member States while the balance of 90.8% is funded by Development Partners.

This situation is not sustainable and if meaningful regional integration is to be achieved, dependence on donor resources needs to be reversed urgently so that the bulk of regional activities are funded by SADC Member States using domestic resources.To address the growing need for resources alluded to in the preceding section, SADC and its Development Partners adopted the Windhoek Declaration in 2006 to guide cooperation between SADC and Development Partners for the achievement of the SADC socio-economic development agenda (as outlined in the Regional Indicative Strategic Development Plan - RISDP) and the overarching objective of poverty eradication.

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