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New Report Estimates SDG Financing Needs for 59 of the World’s Lowest-Income Countries

By Vanessa Fajans-Turner and Taylor Smith

Four years since the adoption of the SDGs, many governments have yet to produce a comprehensive financial needs assessments for achieving the Goals’ in their countries. This is particularly concerning for the world’s 59 low-income developing countries, which face the greatest financing challenges. Without an approximate estimate for the Goals’ budgetary needs, it is impossible to create an SDG-focused budget to facilitate their achievement.

SDSN’s paper SDG Costing & Financing for Low-Income Developing Countries (LIDCs) offers an initial estimate of the SDG financing needs for 59 of the world’s lowest-income countries. This cost estimate covers eight SDG sectors including health, education, infrastructure (including climate adaptation and mitigation), agriculture, biodiversity & ecosystem services, social protection, access to justice, and data for the SDGs. It draws on data for domestic government revenue flows and future potential, combined with non-SDG public expenditures to calculate the resulting SDG financing gap.

Achieving the SDGs in low-income countries will require budget outlays on the order of 45-59 percent of GDP in low-income countries, and around 27-37 percent in lower-middle-income countries. The total financing gap for these 59 countries is on the order of an average $400 billion per year through 2030. The greatest SDG challenge arises from the fact that the domestic budget revenues available to this group of countries, even following ambitious growth scenarios to 2030, will necessarily fall far short of their budget needs.

Though the total SDG financing gap of $400 billion seems daunting, it amounts to just 0.7 percent of the advanced economies’ GDP, and just 0.4 percent of the world economy as a whole. SDSN presents a number of options to fill the financing gap and to promote enhanced international cooperation for achieving the SDGs.

Key recommendations to closing the financing gap include:

  • Scaling domestic revenue mobilization strategies.
  • Increasing and better targeting official development assistance.
  • Re-invigorating private philanthropy.
  • Mobilizing private investment where appropriate.
  • Introducing globally harmonized taxes earmarked to the SDGs.

SDSN emphasizes the need for country-level needs assessments to achieve the SDGs and underscores that many low-income countries are not conducting these assessments and therefore are not optimizing their national budgets for SDG achievement. The intention of the SDSN’s SDG Financing initiative is to identify costing mechanisms and models that can be updated, customized and deployed at the country level as the global costing community works together to streamline the SDG needs analysis process and coordinate new efforts to better support low and lower-middle-income countries to assess their SDG budgetary and financing needs.

Click here to read the full report.

About SDSN

The Sustainable Development Solutions Network (SDSN) was commissioned by UN Secretary-General Ban Ki-moon in 2012 to mobilize scientific and technical expertise from academia, civil society, and the private sector to support practical problem solving for sustainable development at local, national, and global scales. SDSN operates national and regional networks of knowledge institutions, solution-focused thematic networks, and is building the SDG Academy , an online university for sustainable development.

About the SDSN Costing Group

In 2018, SDSN launched and became the Co-Chair of a Working Group on SDG Costing & Financing with the IMF, OECD, and World Bank. This group convenes sector experts to aggregate their respective costing models and data for SDG targets, especially for low-income countries.

In addition to assessing SDG financing needs, this Group advances quantitative and qualitative research on financing frameworks and tools such as aid flows, tax strategies, philanthropy, and blended finance to meet these needs.

Beyond SDSN, the Working Group builds on the excellent and pioneering work of several institutions including the IMF, World Bank, and OECD. Its membership includes representatives from 15 multilateral and academic institutions.