Africa Can Unlock $469bn Annually Without Raising Taxes – AfDB Pushes Efficiency Reform

Africa has the potential to unlock more than $469bn in additional annual revenue without increasing tax rates, according to the African Development Bank (AfDB). The revelation points to a major shift in how the continent can fund development—through efficiency rather than higher taxation.

This was disclosed by the AfDB Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof Kevin Urama, during an interview with the News Agency of Nigeria in Abuja. He explained that the key lies in strengthening how governments collect and manage existing taxes, rather than introducing new tax burdens on citizens.

According to him, reforms such as digitalising tax systems, improving public institutions, and upgrading service delivery could significantly increase compliance levels across African economies. These improvements, he said, would allow governments to raise substantial revenue that is currently being lost through inefficiencies and weak systems.

Urama noted that many citizens across the continent are reluctant to pay taxes because they often have to provide essential services themselves, including electricity, water, and road infrastructure. He stressed that this weakens trust between governments and citizens, reducing voluntary compliance and limiting national revenue potential.

The AfDB, he added, is already working with several African countries, including Nigeria, to strengthen domestic revenue mobilisation. The bank is also promoting tools like a Public Service Delivery Index, aimed at encouraging governments to improve accountability, rebuild trust, and strengthen the “social contract” between the state and its people.

source: punch