Africa $469bn revenue gain is achievable without raising tax rates through better tax administration and stronger compliance, AfDB says

The Chief Economist and Vice President for Economic Governance and Knowledge Management at the African Development Bank, Prof Kevin Urama, on Wednesday said Africa could unlock more than $469bn in additional annual revenue without increasing statutory tax rates, provided governments improve tax administration and strengthen compliance systems.

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Urama made the disclosure in an interview with the News Agency of Nigeria in Abuja, where he argued that stronger domestic resource mobilisation remains the most reliable and sustainable source of development financing across the continent.

According to Urama, the Africa $469bn Revenue Gain could be achieved through reforms focused on digitalisation, improved efficiency and the adoption of proven tax administration practices rather than imposing higher tax burdens on citizens and businesses.

“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,” Urama said.

The economist noted that weak public service delivery remains a major obstacle to tax compliance in many African countries.

Urama explained that many citizens are often reluctant to pay taxes because they are forced to independently provide essential services such as electricity, water supply and road infrastructure.

He said governments could significantly improve voluntary compliance by demonstrating greater accountability and delivering visible benefits to taxpayers.

According to Urama, strengthening transparency, improving public services and ensuring prudent management of public resources would help rebuild trust between governments and citizens.

The AfDB executive highlighted the importance of reinforcing the social contract, arguing that taxpayers are more likely to meet their obligations when they see evidence that public funds are being used effectively.

As part of broader efforts to support economic governance reforms, Urama said the African Development Bank is working with several African countries, including Nigeria, to enhance domestic revenue mobilisation.

The support includes capacity-building programmes for national revenue authorities aimed at improving collection efficiency and expanding the tax net without increasing rates.

A notable element of the bank’s reform agenda is the development of a Public Service Delivery Index, designed to encourage governments to improve service quality and strengthen accountability.

Urama said the initiative would provide a powerful tool for assessing government performance and promoting reforms that enhance citizen confidence in public institutions.

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The Africa $469bn Revenue Gain projection comes at a time when many African governments are seeking new ways to finance infrastructure, social programmes and economic development while limiting additional debt burdens and avoiding tax increases that could slow economic activity.