Africa should adopt digitisation, tax reforms to fund development: ECA

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Economic Commission for Africa
PHOTO/COURTESY: ECA

Africa must digitise its economies, broaden its tax base and prevent further deterioration of fiscal and debt positions if it is to achieve the United Nations 2030 Sustainable Development Goals (SDGs), a new economic report has revealed.

According to the report, a flagship publication of the United Nations Economic Commission for Africa (ECA), the revenues collected by African countries are not sufficient to meet countries’ development financing needs.

“African countries continue to search for policy mixes to help accelerate the achievement of the SDGs. However, for many countries, financing remains the biggest bottleneck with implementing capacity a close second,” Vera Songwe the ECA’s Executive Secretary stated at the launch of the report.

While analysing and highlighting both challenges and opportunities, the report also recommends comprehensive macroeconomic reforms aimed at building financial resilience, placing emphasis on the need for the continent to accelerate growth to double digits by 2030 and to boost investment from its current 25 per cent of GDP.

The report similarly revealed that economic growth in Africa remained moderate at 3.2 per cent in 2018 due to solid global growth, a moderate increase in commodity prices and favourable domestic conditions.

In some of Africa’s largest economies—SA, Angola and Nigeria – the report reveals, growth trended upwards but remains vulnerable to shifts in commodity prices.

East Africa remains the fastest growing, at 6.1 per cent in 2017 and 6.2 per cent in 2018, while in West Africa, the economy expanded by 3.2 per cent in 2018, up from 2.4 per cent in 2017. Central, North and Southern Africa’s economies grew at a slower pace in 2018 compared to 2017.
 
On the issue of Africa’s debt burden, the report revealed that debt levels remained high as African countries increased their borrowing, to ease fiscal pressures most of which have been precipitated by the narrowing of revenue streams that has gone on since the commodity price shocks of 2014.

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