Deputy Governor: Sustainable financing key to future of developing economies

Kampala, Uganda — Deputy Governor Prof. Augustus Nuwagaba has called for urgent action to mobilise sustainable financing to secure the future of developing nations, warning that without bold reforms and innovative financing, global development goals risk falling out of reach.

Prof. Nuwagaba said that many developing countries are trapped in a cycle of rising debt and limited fiscal space, leaving them unable to invest adequately in health, education, infrastructure, and climate resilience. He emphasised that sustainable financing is not just a policy option — it is a necessity for long-term growth and stability.

“Financing for development is paramount,” he said. “If we are to achieve the Sustainable Development Goals, we must reform how the global financial system works and mobilise resources that truly meet the needs of developing economies.”

Highlighting the challenges of debt sustainability, Prof. Nuwagaba urged countries to explore innovative mechanisms such as debt-for-development swaps and blended finance platforms.

He explained that debt-for-development swaps allow debtor governments to exchange portions of their sovereign debt for commitments to fund agreed-upon projects — such as those supporting health, education, or climate adaptation.

Similarly, blended finance uses public and philanthropic funds to reduce risk for private investors, encouraging them to invest in sustainable projects that might otherwise be overlooked.

“These tools can help redirect financial resources from debt repayment toward building schools, hospitals, and resilient communities,” Prof. Nuwagaba said. “They turn debt into development.”

Prof. Nuwagaba’s remarks echo the momentum generated at the 4th International Conference on Financing for Development held in Seville, Spain, where world leaders adopted the Seville Commitment — a framework that outlines global efforts to close the $4 trillion annual financing gap faced by developing countries.

The commitment calls for reforms to the international financial architecture, including a “Debt Pause Clause” to provide temporary relief during crises, and measures to expand the lending capacity of multilateral development banks. It also promotes domestic resource mobilisation and stronger international cooperation.

Prof. Nuwagaba said such reforms are essential to building inclusive and effective financial systems that can support sustainable development in Africa and beyond.

The Deputy Governor also pointed to the private sector’s crucial role in advancing sustainable development. By integrating Environmental, Social, and Governance (ESG) standards into business and investment decisions, he said, private capital can become a powerful driver of positive change.

He added that global taxation mechanisms — such as taxes on financial transactions or carbon emissions — could provide new revenue streams for sustainable development, while multilateral banks and international institutions offer long-term financing and technical assistance to help countries meet their goals.

“Investing in climate action and sustainable growth isn’t just the right thing to do; it’s the smart thing to do,” Prof. Nuwagaba said. “The time for action is now.”

Prof. Nuwagaba concluded by urging governments, civil society, and international partners to work together to ensure that all financing for development directly supports the Sustainable Development Goals (SDGs).

“Together, we can reform the global financial system and mobilise the resources needed for a sustainable and equitable future,” he said. “This is our opportunity — and our responsibility — to act.”