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The United Nations`s (UN`s) Third International
Conference on Financing for Development in Addis Ababa

    The Addis Ababa Conference brings together governments, businesses and civil society to mobilize the resources needed to implement the UN`s Sustainable Development Goals (SDGs - the foundation of the post-2015 development agenda) and a new global climate agreement, both of which are due later this year. The Addis Conference is an opportunity for policymakers to turn rhetoric into action, by agreeing on the funding and financial tools that can put the SDGs within reach.
    The good news is that many of the solutions, technologies, and skills needed to achieve these global goals already exist. One important factor is the transition from cash to digital payments. There is growing evidence that digitizing payments boosts transactional efficiency, reduces costs, improves transparency and accountability, unlocks domestic resources, and drives financial inclusion in the places that need it most.
    In Mexico, the government trimmed its spending on wages, pensions, and social welfare by 3.3% annually, or nearly US$1.3bn, by centralizing and digitizing its payments;
    In India, a McKinsey study estimates savings for the government of over US$22bn annually through automated payments that help reduce transaction costs and fraud.
    Not only can digital payments deliver major cost savings in straightened fiscal times, they also offer governments a rare boost on the revenue side of national ledgers. By bringing more people and businesses into the formal economy, digital payments can vastly expand a country`s tax base, providing new funds to invest in the drivers of productivity and growth.
    The financial exclusion of so many people and businesses – all potential sources of economic growth – makes no sense, particularly at a time when growth is now slowing in much of the developing world. Figures like these also demonstrate why drafts on the Addis Accord prepared in advance of the conference repeatedly call for greater financial inclusion, including for women and SME (Small and Medium Sized Enterprises).

The Economist (Source: http://www.economistinsights.com/technologyinnovation/opinion/cashing-out - adapted)