AU Commissioner for Trade and Industry calls for enhanced tax revenue mobilisation to boost development

Africa's average tax revenue mobilisation rate to gross domestic product (GDP) stands at 15 percent, compared to 25 percent in South America and 34 percent in Europe.

The African Union Commissioner for Economic Development, Trade, Industry and Mining, Mr Albert Muchanga, disclosed this during a press briefing in Accra on the sidelines of the African Union Mid-Year Coordination Meeting on Saturday.

He emphasised the need for African governments to develop innovative strategies to increase domestic tax revenue.

That, he stated, is crucial for financing infrastructural development and social interventions on the continent.

“African country's reliance on foreign aid for development has not helped them to achieve their development aspirations,” he added.

He pointed out that the African Union's recent membership in the G20 aims to support the 2063 Agenda, focusing on economic cooperation, debt sustainability, inflation stability and global financial and economic resilience.

Among the AU's immediate priorities are restructuring Africa's debt to multilateral financial institutions, eradicating poverty and hunger, curbing illicit financial flows and stopping illegal gold smuggling. Africa loses $80 billion annually due to illicit financial outflows, he noted.

Additionally, he said, the AU is working to establish Africa's first Credit Rating Agency and Capital Market to secure favourable loan ratings for member states. Efforts are underway to train capital market experts to staff these new institutions.

Mr Muchanga stressed the importance of credible economic statistics for proper economic forecasting and announced plans for an African Investment Platform to eliminate barriers to investment across the continent.

To strengthen Africa's voice in the G20, he called for deeper economic integration within the continent and urgent reforms of the global financial architecture to ensure favourable ratings for African nations seeking loans.

He also emphasised the need to combat the perception that Africa is a risky place to invest.