Financing the Post-2015 Development Agenda: Domestic Revenue Mobilization in Africa

TITLE: Financing the Post-2015 Development Agenda: Domestic Revenue Mobilization in Africa

AUTHOR(S): Bhushan A, Samy Y & Medu K

YEAR: 2013

ABSTRACT: Attention is starting to turn to how the ambitious post-2015 agenda will be financed. High expectations are being set for the role that domestic resource mobilisation can play in financing the post-2015 development goals. The report analyses recent domestic resource mobilisation performance in Africa and estimates a tax effort index for sub-Saharan African countries. Tax mobilisation in the region is increasing, but the trend is driven by resource rich countries and resource related taxes. However, mobilisation remains low despite significant effort and recent reforms in non-resource rich sub-Saharan countries. This is often the result of a combination of structural factors, inefficient and ineffective tax systems, significant tax exemptions, tax avoidance and capital flight. Expectations regarding the extent to which domestic revenue can finance ambitious post-2015 goals need to be tempered. Mobilisation goals need to be balanced against growth, investment and other objectives. Ultimately enhancing tax mobilisation is about building a better state-citizen compact than exists across most countries in the region today.