An analysis of the potential for achieving the fourth millennium development goal in SSA with domestic resources

The importance of good health is reflected in the fact that more than half of the eight Millennium Development Goals (MDGs) are aimed at improving health status. Goal 4 (MDG4) aims to reduce child mortality. The progress indicator for goal 4 is the under-five mortality rate (U5M), with a targeted reduction of two thirds by 2015 from 1990 levels. This paper seeks to compare the time (in years) Sub Saharan African (SSA) countries will take to reach their MDG4 target at the current rate of decline, and the time it could have taken to reach their target if domestic resources had not been lost through illicit financial flows, corruption and servicing of debt since 2000.

We estimate the amount by which the Gross Domestic Product (GDP) per capita would increase (in percentage terms) if losses of resource through illicit financial flows, corruption and debt servicing, were reduced. Using the income elasticity of U5M, a metric which reports the percentage change in U5M for a one percent change in GDP per capita, we estimate the potential gains in the annual reduction of the under-five mortality if these resource losses were reduced.

At the current rate of reduction in U5M, nine countries out of this sample of 36 SSA countries (25%) will achieve their MDG4 target by 2015. In the absence of the leakages (IFF, corruption and debt service) 30 out of 36 (83%) would reach their MDG4 target by 2015 and all except one country, Zimbabwe would have achieved their MDG4 by 2017 (97%). In view of the uncertainty of the legitimacy of African debts we have also provided results where we excluded debt repayment from our analysis.

Most countries would have met MDG4 target by curtailing these outflows. In order to release latent resources in SSA for development, action will be needed both by African countries and internationally. We consider that stemming these outflows, and thereby reducing the need for aid, can be achieved with a more transparent global financial system.