By Lawrence Odoom
President John Dramani Mahama has urged African Heads of State to prioritize tax compliance as a vital strategy to address the continent’s substantial financing gap.
Speaking at the Heads of State and Government breakfast dialogue at the AU Commission headquarters in Addis Ababa, Ethiopia, Mahama emphasized the need for a multifaceted approach to bridge the estimated $402 billion annual financing gap facing Africa until 2030.
“Addressing the financial gap requires a multifaceted approach. Domestic resource mobilization is crucial for improving tax administration, combating illicit financial flows and encouraging the culture of tax compliance,” Mahama said.
He also highlighted the numerous challenges Africa faces, including climate crises, geopolitical tensions, and diseases, which threaten the continent’s growth and sustainable development.
Mahama stressed the importance of strategic investments in key sectors like health, education, energy, and technology, acknowledging the substantial financing gap for these investments. “This financing gap is not merely a statistic. It represents the unrealized potential of millions of Africans whose dream for a better life depends on our ability to invest wisely in infrastructure, education, technology, and health,” he noted.
Dr. Ngozi Okonjo Iweala, Director General of the World Trade Organization (WTO), echoed Mahama’s sentiments, calling on African leaders to reduce their reliance on borrowing and instead explore innovative ways to attract and sustain investments. “We must take advantage of investment that comes to Africa and be able to sustain them for our own development,” she said.
Okonjo Iweala suggested that the continent could raise funding through value addition to natural resources and tapping into pension funds to raise patient capital for development. Ultimately, by adopting these strategies, African leaders can bridge the financing gap and unlock the continent’s vast potential for growth and development.
