Integrated National Financing Frameworks (INFFs)

INFFs aim to establish an integrated financing reform agenda that supports the transition to SDG-centric budgeting. Through summative research and drawing on a toolbox of empirical models and dynamic simulations, national financing strategies are advanced to harness investments of all kinds to bridge the SDG-financing gap.

Integrated National Financing Frameworks encompass an integral set of tools, processes and methods to overcome existing barriers to financing sustainable development at the country level. These frameworks present a full range of financing sources and channels (public, private, domestic, international, innovative, traditional and debt-financing) that could be tapped by national authorities to finance the SDGs, thereby allowing countries to develop a home-grown strategy to mobilize investments, manage financing risks, and achieve sustainable development priorities, as identified in a country’s national sustainable development strategies.

An INFF spells out how national sustainable development strategies and sector plans will be financed, implemented and monitored. INFFs are developed on the basis of four building blocks that seek to ensure the following:
- Provide detailed analytical assessment and diagnostics of the financing landscape.
- Develop the financing strategy, including the necessary medium-term revenue strategies to bridge the SDG-financing gap by exploiting all channels, conduits and modes of financing.
- Monitor and review the implementation of INFFs and identify the supporting regulatory and institutional reforms needed.
Establish the governance and coordination requisites to ensure that countries are placed on a sustained path to finance their national ambitions under the 2030 Agenda.

To date, most countries have begun preparing voluntary national reviews, but seldom assign a price to achieving the SDGs or indicate how they would be financed at the national level. Equally, national development plans outline a country’s vision for sustainable development, and the steps needed to achieve that vision. Yet, most plans and strategies lack concrete plans for how to finance these actions — a critical missing link that leaves many SDGs underfunded. To support countries in implementing INFFs, ESCWA, alongside other executing agencies including the United Nations Department for Economic and Social Affairs, the United Nations Conference on Trade and Development, the Economic Commission for Latin America and the Caribbean, the Economic Commission for Europe, the Economic Commission for Africa and the Economic and Social Commission for Asia and the Pacific, has put forward a Development Account project entitled “Towards integrated national financing frameworks”. The project aims to support countries in navigating an increasingly complex financing landscape, enhance coherency between the different financing channels, and help mobilize additional financing towards sustainable development.

About INFFs

SDG Costing Simulator

The SDG Costing Simulator is a dynamic tool that estimates the cost of national sustainable development priorities. By tracking SDG progress and delineating future trajectories and landing zones, this tool captures the plausible efficiency gains to be accrued by optimizing financing decisions and accounting for SDG interlinkages.

Estimating the cost of the SDGs provides insights on the scale of resources that need to be mobilized by 2030. Yet, many Governments lack the means to produce comprehensive needs-based assessments, and face challenges in assigning a price tag on nationally defined SDG priority targets. Without adequate assessment of the costs, countries cannot transition to SDG-centric budgeting; and without forward-looking budgets, financing national sustainable development strategies will remain elusive.

Furthermore, global estimates mask significant disparities in SDG-related spending. The High-Level Political Forum on Sustainable Development maintains that global figures and aggregate SDG cost estimates need to be complemented by granular examinations at the national level. The World Economic Situation and Prospects report contends that relying on a single method or model to cost the SDGs can render distorted results. The United Nations Sustainable Development Group argues that SDG-cost estimates should rely on a set of methodologies capable of capturing distinct features of the dynamics associated with pursuing the 17 SDGs, while the first quadrennial review concludes that SDG costing should remain sensitive to country-specific contexts.

The SDG costing framework developed by ESCWA builds on the above to advance an intuitive approach to costing the SDGs: one that is sensitive to national contexts and the goals being estimated. The SDG costing framework employs a series of methodologies and empirical tools, drawn from a range of sciences and disciplines, to project and simulate the costs associated with achieving national sustainable development priority targets. The framework posits a rigorous analytical technique to estimate these costs, and is complemented by computing mirror estimates drawn from an array of methods and tools advanced by United Nations specialized agencies and SDG custodian entities, funds and programmes.

The costing framework is supported by the SDG Costing Simulator that displays the projected costs associated with achieving national sustainable development priorities, and leverages an empirical-based SDG optimization tool that captures the efficiency gains that can be accrued from harnessing SDG interlinkages.

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SDG Financing Solutions

The SDG Financing Simulator is an interactive tools that employs a set of econometric models to assess financing densities and propensities. It analyses the scale of official flows available to finance development, and potential sources of additional financing to implement national sustainable development plans and strategies.

Just as the world had embarked on the Decade of Action, the COVID-19 pandemic affected all channels of financing advanced through the Addis Ababa Action Agenda (public, private, domestic, international, innovative, traditional and debt-financing).
Today, the Arab region is challenged by an anomaly of financing vulnerabilities that continue to manifest themselves asymmetrically across economies, adding to existing inequalities and the price tag of achieving the SDGs. The SDG Financing Simulator aims to overcome five major financing rifts facing the Arab region: financing insolvency; funding shortfalls; fiscal space constraints; debt-financing overhangs; and financing inequalities. The Simulator employs a set of empirical models supporting policymakers in undertaking the following:

- Establishing the rate of growth required to generate sufficient levels of financing, as measured through the aggregate measure of SDG support, to finance country-specific SDG financing gaps.
- Determining the magnitude of each prime channel of financing available for any given rate of growth realized.
- Establishing a dynamic relationship that allows policymakers to assess the impact of different growth levels on SDG-related financing (the same functionality can be employed to capture the financing implications of any other shocks to GDP).
- Simulating and projecting the behaviour of the prime financing channels available to Egypt up to 2030.

For years, the Arab region has been on the receiving end of financing prescriptions advocating for fiscal consolidation, reducing dependence on primary commodities, and prompting diversification and structural transformation. However, these prescriptions come amid a global drive towards rationalization, tightening liquidity conditions, increased non-economic risks, rising trade and investment protectionism, and declining real wages; and coincide with rising levels of debt distress and high exposures to illicit financial flows. These are the underlying factors that undermine the region’s financing propensities and aggravate its financing densities, adding to the more than $6 trillion needed by the Arab region to achieve the 2030 Agenda.

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Data Analytics

The data analytics database continually monitors progress and tracks the Arab region’s prime financial and non-financial means of implementation of the 2030 Agenda. The database displays the dynamics associated with public, private, domestic, international, traditional and innovative modes of financing.

Monitoring is an ongoing process that should be undertaken periodically at the global, regional and national levels. To properly monitor the financing landscape, the database employs over 25 empirical models, algorithms and quantitative regression analysis, covering more than 22 prime channels of financing available to a country, as prescribed by the Addis Ababa Action Agenda. The data analytics enables policymakers, researchers and national stakeholders to monitor and guide policy towards more SDG-friendly national financing strategies, facilitate adaptation of financing synergies, and help mitigate macro financial risks.

The database furnishes a comparative FfD health monitor that ultimately captures all aspects of FfD progress, implementation gaps, opportunity costs and returns on financing, as well as emerging challenges and the means to address them within intra and inter-regional configurations.

The development of the FfD health monitor relies heavily on the analytical database, which would ultimately capture all aspects of FfD progress, implementation gaps, opportunity costs and returns on financing, as well as emerging challenges and the means to address them within intra- and inter-regional configurations.

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Welcome to the Arab Financing for Development Gateway

The Arab Financing for Development Gateway serves as a depository for new knowledge. This unique platform provides in-depth analysis and systemic responses to enhance public financial management, fiscal space and domestic public resource mobilization, leverage additional private investments, and harness an array of innovative solutions to place Arab economies on a sustained trajectory towards financing the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs).

Through the Arab Financing for Development Gateway, ESCWA strives to support policymakers and national stakeholders by offering a range of dynamic and interactive tools to assist in the design of integrated financing strategies, support the transition to SDG-centric financing, and advance the implementation of national sustainable development strategies, plans and macroeconomic frameworks.

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