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Economic Report on Africa 2019

Fiscal Policy for Financing Sustainable Development in Africa

image of Economic Report on Africa 2019

The 2019 edition of the Economic Report on Africa explores the intricate terrain of revenue collection on the continent and makes salient recommendations to help African countries attain the SDGs and the aspirations of Agenda 2063 by expanding their fiscal space and how. It identifies several quick wins in Africa’s pursuit of additional fiscal space to finance achievement of the SDGs and the aspirations of Agenda 2063. The Report calls on African countries to stabilize the macroeconomic environment, it advises against using competitive tax breaks for attracting international companies, and calls on African countries and their global partners to muster external public and private resources, at the same time, urges countries to pay attention to debt sustainability issues.

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Tax policy and performance in Africa

Africa has a low tax capacity (ability to collect taxes) of about 20 per cent of GDP and a lower tax revenue to GDP ratio (17 per cent) than other regions, largely because of inefficiencies in tax policy and revenue collection. Thus, addressing tax capacity constraints and collection inefficiencies could boost tax revenue in Africa by 3 per cent of GDP (the difference between the current tax ratio and tax capacity)

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