(Ecofin Agency) - Africa could raise $99 billion yearly by adopting better tax policies, the UNECA indicated in a report published last week.

In the 2019 edition of its Economic report on Africa, the UNECA stated that in Africa, taxation policies can increase the GDP by 4.6% thus relieving public financing amid increased investments.

Indeed, while there is an increased volume of development projects in the continent, countries still largely rely on foreign aids. With the increase of bond issuances in the continent recently, public finances are under pressure due mainly to the rising weight of the debt. In 2017, the continent’s public debt was about 57% of GDP (twice its volume five years earlier).

Despite this rise of the debt, African countries are unable to bridge the financing gap (estimated to be 11-13% of continental GDP according to the UNECA) that should help them meet the UN’s sustainable development goals and the African Union’s 2063 agenda.

For the UNECA, to bridge this gap, Africa should hasten the digitalization of tax administrations and elaborate taxation policies based on the economic cycles.

By reinforcing the tax and non-tax resources collection methods, “public revenues could rise by 12 to 20% of GDP in the continent,” the UNECA indicates.

Moutiou Adjibi Nourou