UN report points how African governments boost revenue

UN report points how African governments boost revenue

Economy

A new report by the UN Economic Commission for Africa (UNECA) points out how Africa government can boost their revenue by up to 20% of their GDP.

Entitled, ‘Fiscal policy for financing sustainable development in Africa, the 2019 Economic Report on Africa has indicated that African government’s intervention in five key areas can boost revenue of governments from 12% to 20% of their Gross Domestic Product (GDP).



The report stated that introducing e-taxation can increase a country’s revenue by 6% of its GDP, as seen in the case of Rwanda. While taxing hard to reach sectors can also increase revenue of a government by 4.6% of its GDP. Indicating that 60% of Africa governments’ tax revenue is coming from indirect taxes, the report suggested expansion of tax collection from the people in the informal sector.

The report also finds that countries that adopt a countercyclical fiscal policy that could increase government revenue by 5% of GDP. That includes taking business cycles into account I implementing fiscal policy to avoid the adverse impacts for macroeconomic stability that come with ignoring the business cycle.

The report launched i Marrakech, Morocco on Saturday also indicated that fighting tax evasion ad avoidance can boost the revenue of a country by 2.7% of its GDP. While tapping non-tax revenue can increase an African government’s income by 2% of its GDP.

The report indicated that the current less that 4% annual GDP growth of Africa is not enough to meet the sustainable Development Goals (SDGs), which replaced the Millennium Development Goals a few years ago.

The continent needs 10% GDP growth on average to meet the 17 SDGs, which includes zero hunger and poverty, good health and wellbeing, quality education, clean water and sanitation as well as affordable clean energy, among others by the year 2030.