AfDB chief economist: Africa can raise $469bn annually without increasing tax rates

By Abubakar Yunusa

Kevin Urama, chief economist at the African Development Bank (AfDB), says African countries can unlock more than $469 billion in additional annual revenue without increasing statutory tax rates through improved tax administration and stronger compliance measures.
Urama, also AfDB’s vice-president for economic governance and knowledge management, spoke on Wednesday in Abuja in an interview with the NAN.
The AfDB official said stronger domestic resource mobilisation remains the most sustainable source of development financing for the continent.
According to the economist, African countries can significantly increase revenue collection by improving tax administration through digitalisation, strengthening public institutions and enhancing public service delivery.
“We see that by improving tax administration through digitisation and other reforms, just adopting best practices, the continent can mobilise more than $469 billion extra without increasing tax rates,” Urama said.
“It is simply about improving efficiency and strengthening compliance.”
The economist said weak service delivery often discourages citizens from paying taxes, as many are forced to provide essential services such as electricity, water, and road infrastructure for themselves.
He said governments could improve voluntary tax compliance by delivering quality public services, strengthening transparency and ensuring prudent management of public resources.
Urama noted that the AfDB is supporting African countries, including Nigeria, to strengthen domestic revenue mobilisation through capacity-building initiatives targeted at national revenue authorities.
The AfDB executive said 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.
He added that stronger domestic resource mobilisation would reduce excessive dependence on external financing and provide countries with greater fiscal space to pursue development priorities.