(Ecofin Agency) - The United Nations Economic Commission for Africa (UNECA) has called for the improvement of tax policies and an enlargement of the tax base for effective financing of African countries’ development.

The call was issued by Vera Songwe (photo), executive secretary of the UNECA during the 38^th meeting of the expert panel of the ministers of finance and development planning which started in Marrakech, Morocco, on March 20, 2019.

She indicated that it was essential to broaden the tax base to be able to fund the implementation of the 2030 and 2063 agenda.

 "The volume of tax raised by a typical economy is about 16% of GDP except in Morocco that collects at least 25% of its GDP," she indicated.

According to the secretary, countries like South Africa and Rwanda can take advantage of new technologies to boost their revenues collection.

 "With a growing population of working age, arable lands in profusion and numerous other resources, the continent has all the prerequisites for rapid economic transformation in the coming decade," she added. 

She indicated that governments need reactive policies to optimize the results of economic activities and let them fully take part in an increasingly interconnected and global world.

She also revealed that as Morocco did, African countries can encourage every citizen to participate in their development by elaborating a good tax policy.  

"Africa can increase its tax collection capabilities by 3% of GDP by finding solutions to fiscal constraints. On the other hand, by harmonizing tax rates and revenues with economic cycles, countries can increase public revenues by 5%,” Vera Songwe said. 

According to her, the medium-term growth prospects, 3-4%, are not sufficient to boost investments that should create jobs and inclusive growth.

She also stressed the importance of the digital economy for growth indicating that Africa would have to train its youth to take advantage of the digital era. However, she added, data protection should also be a priority."If we don’t know how to manage our data, we will be vulnerable. We must ensure that there are adequate institutions to protect individuals and sovereign states as we are progressing," Miss Songwe said.

Stéphane Billé