- Key Highlights
- High financing gap for developing countries, ranging between $2.5 trillion and $4 trillion annually.
- Finance divides: Developing countries face significantly worse terms of access to both long-term and contingency financing.
- Weak enabling environment: Policy, regulatory and tax frameworks are not sufficiently aligned with SDGs.
- Reasons for low financing of SDGs
- Rise in systemic risks have put National financing frameworks under severe stress.
- E.g., Covid 19 pandemic, Rise in frequency of disasters etc.
- Average GDP growth rates in developing countries fell to just over 4% annually (between 2021 and 2025).
- Median debt service burden for Least Developed countries (LDCs) rose to 12% in 2023.
- Other concerns: Digitization induced risks, Rising geopolitical tensions.
- Rise in systemic risks have put National financing frameworks under severe stress.
- Recommendations
- Building tax capacity to improve tax revenue for delivering on SDGs.
- International Development cooperation to mobilizing other financial resources.
- E.g., new approach to blended finance focused on support for sustainable trade and responsible business conduct
- Intensified action to address debt challenges of developing countries.
- Enhancing coherence between trade, investment and sustainable development.
- Funding for data and statistical systems to focus on producing actionable insights for advancing SDGs.