Tuesday, December 11, 2012


1.0 Introduction

Developing countries continue to have challenges in raising enough funding internally for their development. Subsequently, international aid and other development finance avenues offer a great potential to support their funding challenges. In addition, technical support such as expertise and technological transfer enhances their development capacities. However, several factors have constrained many of these developing countries to optimize these funding potentials and other technical support from advance countries.

Paul Wolfowitz (June 2005-June 2007) a past World Bank Director in a presentation in 2007 at the Kwame Nkrumah University of Science and Technology explained how Ghana despite her natural resources and receipts of international support, had not advanced in development like South Korea which has received fairly the same amount of support of about 20 billion US Dollars in the past 20 years.

This awareness raises some critical questions for policy analyst in development finance and experts in Ghana and most African countries. First, the need to understand the reasons for the inadequacy of raising enough funding internally and to also understand the reasons why international aid and other technical support are not being adequately optimized. In addition, project, program and plan implementation financial challenges in Ghana and Africa needs critical investigations that would help build national and local capacity in development finance. In Ghana and most developing countries including Africa, most policies have either been poorly implemented and have not been implemented because of poor financial capacity and management. As a result, the resolve for policy analysts and development finance experts as well as students of policy analysis and development finance would be to develop the requiresite capacity to understand these development finance challenges and formulate and guide the implementation of policies that would build national and local capacities to increase internal revenues and at the same time optimize the potential of external funding options. 

In this paper, the relationships between policy analysis and development finance are discussed. This is to begin a framework of dialogue and discussions leading to researches to identify the various policy options for development finance capacity enhancement in Africa. In addition, the critical issues that underpin the two concepts are presented. There are three main sections of this paper. The first section explores the concepts of policy analysis and draws implications for development finance. The second section examines the relationships between the two concepts. Here, some critical perspectives of development finance are discussed in addition to the organizational environment of development finance. Journals, advocacy groups, among others and their interest in development finance have been discussed. The last section is a summary of the main findings and conclusion from the discussions. The approach adopted in this paper is mainly a review of literature and the websites of key stakeholders in development finance and how policy analysis fits into their operations.