ECA Urges African Countries to Improve Capacity in Revenue Collection

Morocco March 21/2019 The ability to increase revenue collection is significant to Africa’s capacity to finance its development, in particular Agendas 2030 and 2063, according to Economic Commission for Africa (ECA).
The remark was made at Marrakesh, Morocco, yesterday by ECA Executive Secretary Vera Songwe.
In her opening remarks, she said a typical economy on the continent collects just about 16 percent of GDP in taxes, with the exception of countries like Morocco, that collect at least 25 percent.
South Africa and Rwanda are some of the countries that leverage new technologies to expand revenue collection, she added.
According to her, the potential of Africa is promising with a growing working-age population, abundant arable land and a multitude of other resources as well as all the pre-requisites for rapid economic transformation in the next decade.
“However,” Songwe stated that “ensuring the availability of adequate public resources and quality investments to drive structural change requires responsive policies that promote fiscal sustainability, optimize returns from economic activity, and enable economies to fully participate in an increasingly interconnected and globalised world.”
The executive secretary said Africans can do that by ensuring that “we have good fiscal policy.”
“Africa could boost revenues by 3 percent of GDP by addressing its capacity tax constraints. In addition, by better aligning tax rates and revenues with business cycles, countries can boost government revenue by 5 percent,” Songwe noted, adding that the medium-term growth outlook of between 3- 4 per cent for Africa was insufficient to stimulate quality investments that will generate jobs and accelerate inclusive growth.
Songwe also added the importance of digitalization and the digital economy in driving growth as well as optimizing fiscal performance on the continent.
“We are going through a new age where we will become vulnerable to our data if we do not know how to manage it and manage it well. We will have to make sure that we have the right institutions to protect individuals and sovereign states as we move forward.”
Incoming Chair of the bureau of the committee of experts, Zouhair Chorfi, said on his part that digitization is a great opportunity for Africa.
Technology can transform Africa by increasing competitiveness, promoting strong integration, reducing the cost of doing business and strengthening trade, among other things. But safeguards and a solid foundation needed to protect the continent and its people, Chorfi added.