The Urgency of Fiscal Mobilization in Africa: An Imperative for Economic Development
A tax system insufficient to meet growing needs
According to the Economic Commission for Africa (ECA), the fiscal capacity of African countries remains generally weak, with tax rates representing less than 17% of GDP. This level significantly limits the financing of essential public services such as health, education, and infrastructure. Faced with growing economic challenges and international crises, African states are urged to strengthen their fiscal capacities to better meet the needs of their populations.
Broadening the tax base and integrating the informal sector
The ECA identifies broadening the tax base as a priority area to improve tax revenues. A large part of the African economy operates in the informal sector, thereby escaping taxes. By gradually integrating this sector into the tax system and modernizing tax administrations, States could mobilize more domestic resources.
Combating illicit financial flows: a key issue
Every year, Africa loses between $60 billion and $75 billion due to tax evasion and illicit financial flows (IFFs). These losses are often the result of misinvoicing practices in trade or tax evasion in extractive industries. To counter this phenomenon, more robust detection mechanisms and appropriate sanctions are needed, particularly in sectors where these practices are most prevalent.
Towards a progressive tax system to reduce inequalities
The introduction of more progressive tax systems, where higher incomes contribute more, is also recommended. These reforms would help finance social programs and improve access to infrastructure, while reducing economic inequality. Studies, including by the World Bank, highlight that fairer taxes increase taxpayer compliance and promote better revenue collection.
The need for a fair international tax system
Experts also point to the need for a fairer international tax system to allow African economies to fully benefit from their resources. In sectors such as natural resource extraction, investments often come from jurisdictions with opaque tax practices, limiting the tax revenues of African countries.
Conclusion: Mobilizing tax resources, a lever for sustainable development
For African countries, mobilizing greater fiscal resources is essential to ensure growth and meet the basic needs of their populations. The international context limits access to foreign financing on favorable terms, increasing the urgency of optimizing domestic tax systems. By adopting bold reforms, both at the national and international levels, Africa can strengthen its economic resilience and offer sustainable development prospects to its citizens.
