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Financing the strategy

To be effective, actions and initiatives to achieve MDG 1 need to be adequately funded through a combination of public and private resources. Several initiatives bring the promise of a substantial increase in future resources available for the achievement of the MDGs. In conformity with the Millennium Compact, NEPAD is giving priority to improved governance, with an emphasis on inclusiveness, conflict prevention and anti-corruption activities. Its African Peer Review Mechanism has been endorsed by the African Union as a key means for region-wide peer pressure for positive change. In the Maputo Declaration, African Heads of State and Government made a commitment to raise the share of their national budgets allocated to agriculture and rural development to 10 percent within five years. Many African countries have programmes and strategies in place to revitalize agriculture.

Many donor countries are pledging a substantial increase in development assistance: On 24 May 2005, the European Union announced that its Member States - which now provide about US$37 billion in ODA - would double ODA to developing countries by 2015. An agreement was recently reached by the G8 under which the World Bank, the International Monetary Fund and the African Development Bank will immediately cancel all debts, amounting to about US$40 billion, owed to them by the 18 countries that have completed their Poverty Reduction Strategy Papers (PRSPs), with more countries to be included in this list in the future.

These encouraging initiatives have still to be translated into concrete financing strategies. The following general issues and principles need to be considered in this context:

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