Africa could raise $469 billion more in taxes every year if…
Africa is sitting on a revenue goldmine it has barely touched. If the continent’s governments modernise how they collect taxes, using digital tools, closing enforcement gaps and cutting wasteful exemptions, they could unlock an additional $469.4 billion a year between 2025 and 2029.
That is the scale of opportunity the African Development Bank (AfDB) placed before finance ministers gathered in Tangier, Morocco, for the 58th Conference of African Ministers of Finance, Planning and Economic Development.
According to The Guardian, the bank’s Chief Economist, Prof. Kevin Urama, told ministers that Africa’s average tax revenue currently sits at about 18.4 per cent of GDP.
The AfDB estimates this ratio needs to reach at least 27 per cent to close the continent’s annual financing gap of roughly $402 billion, the amount needed to meet the Sustainable Development Goals and the African Union’s Agenda 2063 targets.
The shortfall is driven by a large informal economy, patchy enforcement, fragmented data systems and tax evasion.
The problem is not just what governments are failing to collect. It is also what they are actively losing.
Africa bleeds an estimated $587 billion every year through illicit financial flows, a figure that actually exceeds the $578 billion the continent mobilised in total tax revenue in 2023.
The losses include illegal mining, unregulated trade and billions drained through international tax evasion loopholes. Urama described these as losses largely within governments’ own power to stop.
To close the gap, the AfDB urged ministers to deploy digital payment platforms, unique taxpayer identification systems and artificial intelligence to catch compliance failures.
The bank also called for the elimination of tax exemptions that produce no measurable return and for tighter rules on transfer pricing and capital flight, practices that allow corporations and wealthy individuals to shift profits out of African jurisdictions.
The prescription is not theoretical. Uganda’s Revenue Authority introduced an Electronic Fiscal Receipting and Invoicing System that lifted VAT revenue by 50 per cent after its launch in 2021.
Kenya’s revenue grew 11.1 per cent in 2024, up from 6.4 per cent the year before, on the back of digital compliance systems. These numbers show what is possible when technology meets political will.
For Nigeria, the challenge is especially sharp. Between 2013 and 2023, Nigeria’s tax-to-GDP ratio barely moved, edging down slightly from 8.3 to 8.2 per cent, even as the average across 38 African countries rose from 14.7 to 16.1 per cent over the same period.
The country has one of the lowest tax collection rates on the continent.
President Bola Tinubu signed a sweeping set of four tax reform laws in June 2025, the most comprehensive overhaul of Nigeria’s fiscal architecture in decades.
The laws, which took effect in January 2026, consolidate dozens of overlapping levies into a unified system, create a new Nigeria Revenue Service and introduce digital VAT tools.
The goal, according to the government’s reform committee, is to raise non-oil revenue to 40 per cent of GDP by 2030. But Urama’s remarks in Tangier were a reminder of how wide the gap remains, and how much work lies ahead.
The AfDB said it currently runs 31 active revenue mobilisation programmes across 22 member countries and is prepared to support governments through financing, technical assistance and policy support.
In March 2026, the bank approved a $5.52 million grant to strengthen tax administration in Nigeria and other West African countries, marking the first region-wide tax project the AfDB has financed through the West African Tax Administration Forum.
The bank also announced the launch of a Public Service Delivery Index for Africa, a scorecard designed to measure how effectively governments convert tax receipts into actual services.
