2021 has been a year of momentum for INFFs. Over 50 countries kicked off their INFF processes, bringing the total number of countries developing INFFs to more than 70.
In April, the United Nations Development Programme (UNDP), the United Nations Department of Economic and Social Affairs (UN DESA) and the European Union (EU) celebrated the launch of the INFF Knowledge Platform and shared early experiences from INFF implementation on the sidelines of the 2021 Financing for Development Forum.
The first half of the year also saw the publishing of technical guidance for the INFF building blocks, which further defined INFF approaches and explored the different ways the INFF methodology is being applied in pioneer countries.
At the same time, the persistent threat of Covid-19 has underscored the need for developed and developing countries alike to come up with innovative ways to finance recovery plans and align stimulus with longer-term development goals.
The result of this momentum has been a steady growth in international attention and enthusiasm for INFFs. And a lot of activity! To help keep track of INFF progress worldwide, we put out a survey to 71 countries pursuing an INFF.
A few key takeaways:
- COVID-19 may have initially slowed INFF implementation, but the economic and financial impacts of the pandemic provided a new impetus for implementing INFFs and aligning the development of financing strategies with stimulus plans or revised national development plans.
- Countries are not starting from scratch. Much of an INFF process is about bringing together and strengthening structures and processes that already exist. The survey results show that half of all INFF oversight committees are embedded within existing institutions.
- No two INFFs are the same. Governments are adapting the INFF methodology to reflect their country’s unique context, development trajectory, goals and priorities. The result? INFFs are taking many different shapes.
The pandemic added new urgency to the call for holistic financing strategies
The disruption caused by the pandemic meant that governments spent much of 2020 focused on crisis response and management. Yet, the wide-ranging economic shocks triggered by the pandemic also highlighted the need for holistic and innovative approaches to public and private financing development and Covid recovery.
Economic activity and commercial investment plummeted in 2020. In many countries, stimulus packages were put in place to hold off economic collapse. But in the medium-term, increases in government spending coupled with declining tax revenue will have a marked impact on public expenditure.
As countries look toward recovery, over 70 governments are using INFFs to shape innovative approaches to financing Covid recovery and medium- to long-term sustainable development. Even amidst the 2020 turbulence, many have taken tangible steps towards developing an INFF – a good indication that INFFs are recognised as valuable tools for overcoming development financing challenges.
INFF oversight committees: Strengthening – not reinventing – the wheel
One of the first steps in developing an INFF is determining who will oversee the process. Some countries will create new governing mechanisms. However, most already have bodies responsible for delivering national development plans or governing public and private financing.
The survey results show that many countries are not reinventing the wheel but rather strengthening what they already have. INFF oversight committees have been formalised or are under negotiation in more than half of the countries that reported to the survey (Figure 1). Of the oversight committees that have been established, half are embedded within existing mechanisms.