Africa can raise $469bn without increasing taxes — AfDB

The African Development Bank has said African countries can generate more than $469bn in additional annual revenue without increasing statutory tax rates.

The Chief Economist and Vice President for Economic Governance and Knowledge Management at the AfDB, Kevin Urama, disclosed this during an interview with the News Agency of Nigeria on Wednesday in Abuja.

According to Mr Urama, the continent can unlock the massive revenue potential through stronger domestic resource mobilisation, improved tax administration, and better public service delivery rather than introducing higher taxes.

Digitalisation, efficiency key to revenue growth

Mr Urama explained that adopting modern tax administration systems and strengthening institutions could significantly improve compliance levels across Africa.

“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.

He stressed that domestic resource mobilisation remains the most sustainable pathway for financing Africa’s development needs.

Poor public services affect tax compliance

The AfDB economist noted that many Africans are often reluctant to pay taxes because they still provide essential services for themselves despite government taxation.

According to him, citizens frequently shoulder the burden of electricity supply, water access, road repairs and other infrastructure challenges.

Mr Urama stated that governments can improve voluntary tax compliance by strengthening transparency, ensuring prudent management of public funds and delivering better public services.

AfDB supporting African governments

He added that the AfDB is already supporting several African countries, including Nigeria, through capacity-building initiatives targeted at national revenue authorities.

The bank has also developed a Public Service Delivery Index aimed at encouraging governments to improve governance and rebuild trust between citizens and the state.

According to Mr Urama, stronger service delivery would help reinforce the social contract and encourage more citizens and businesses to comply with tax obligations voluntarily.

Push for sustainable development financing

The remarks come amid growing concerns about debt sustainability, fiscal pressures and limited public revenues across many African countries.

Economic experts have increasingly called on governments to focus on plugging leakages, formalising informal sectors and modernising tax systems instead of introducing new tax burdens on struggling citizens.

The AfDB’s position aligns with broader continental discussions on sustainable financing strategies capable of supporting infrastructure, healthcare, education and economic growth across Africa.