Africa can unlock more than 469 billion dollars in additional annual revenue without increasing statutory tax rates, according to the African Development Bank (AfDB).
The bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof. Kevin Urama, disclosed this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.
Urama said the continent could significantly boost its revenue through improved tax administration and stronger compliance measures rather than imposing higher taxes on citizens and businesses.
According to him, domestic resource mobilisation remains the most sustainable source of development financing for African countries.
He explained that adopting best practices in tax administration, including digitalisation and institutional reforms, would help governments collect more revenue efficiently.
“We see that by improving tax administration through digitisation and other reforms, just adopting best practices, the continent can mobilise more than 469 billion dollars extra without increasing tax rates. It is simply about improving efficiency and strengthening compliance,” he said.
Urama noted that many citizens are often reluctant to pay taxes because they have to provide essential services for themselves, including electricity, water supply, and road infrastructure.
He stressed that governments could encourage voluntary tax compliance by improving public service delivery, strengthening transparency, and ensuring prudent management of public resources.
According to the economist, citizens are more willing to meet their tax obligations when they see tangible benefits from government spending.
Urama also revealed that the AfDB is supporting several African countries, including Nigeria, to strengthen domestic revenue mobilisation through capacity-building programmes for national revenue authorities.
He added that the bank has developed a Public Service Delivery Index designed to help governments improve service delivery and strengthen the social contract between citizens and the state.
The AfDB official said better governance, stronger institutions, and efficient tax systems would play a crucial role in helping African nations generate the resources needed to finance development priorities and reduce dependence on external funding.
