African countries could generate an additional $469.4 billion in tax revenue yearly between 2025 and 2029 if they adopt digital tools, stronger enforcement and simplified tax systems, the African Development Bank (AfDB) has said.
The bank’s Chief Economist, Prof. Kevin Urama, stated this at the 58th Conference of African Ministers of Finance, Planning and Economic Development (COM58) held in Tangier, Morocco.
Urama told finance ministers that Africa’s average tax revenue stood at 18.4 per cent of GDP, well below the 27 per cent minimum needed to fund development. The shortfall, he said, is driven by a large informal sector, weak enforcement, data fragmentation and tax evasion.
Beyond raising revenue, he said African governments were also losing over $587 billion yearly to illicit financial flows, corruption and wasteful spending, losses he described as largely within governments’ own power to stop.
For Nigeria, where the tax-to-GDP ratio has hovered around six to eight per cent in recent years, the challenge is acute. The Federal Government has made tax reform the focus of its economic agenda, but Urama’s remarks underscored how much ground remains to close.
The AfDB chief urged ministers to deploy digital payment platforms, unique taxpayer identification systems and artificial intelligence to detect compliance gaps. He also called for the phase-out of tax exemptions that deliver no measurable economic return, and for tighter controls on transfer pricing and capital flight.
According to Urama, the AfDB currently runs 31 active domestic resource mobilisation programmes across 22 member countries, and stands ready to support governments through financing, technical assistance and policy advice.
The bank also flagged the launch of a Public Service Delivery Index for Africa, a standardised measure of how well governments are translating tax revenue into services as a tool to rebuild citizen trust in public institutions.
