Africa Can Generate $469 Billion Extra Annually Without Raising Taxes – AfDB

The African Development Bank has stated that Africa has the potential to unlock more than $469 billion in additional annual revenue without increasing statutory tax rates.

The bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof Kevin Urama, made this known in an interview on Wednesday in Abuja.

He explained that the additional revenue could be mobilised through stronger domestic resource mobilisation, which remains the most sustainable source of development financing for the continent.

According to him, improving tax administration via digitalisation, strengthening public institutions, and enhancing service delivery would significantly boost tax compliance.

“We see that by improving tax administration through digitisation and other reforms, just adopting best practices, the continent can mobilise more than $469bn extra without increasing tax rates. It is simply about improving efficiency and strengthening compliance,” he said.

Urama noted that many citizens are reluctant to pay taxes because they often have to provide essential services like electricity, water, and road infrastructure for themselves.

He added that governments could improve voluntary tax compliance by delivering quality public services, strengthening transparency, and ensuring prudent management of public resources.

The AfDB is supporting African countries, including Nigeria, to strengthen domestic revenue mobilisation through capacity building for national revenue authorities.

The bank has also developed a Public Service Delivery Index to encourage governments to improve service delivery and strengthen the social contract between citizens and the state.