Abstract
The importance of domestic resource mobilization for Africa is well recognized in the extent literature. The capacity dimension has however been neglected in the development discourse. To address such shortcomings, this paper draws on the Africa Capacity Report 2015 on ‘Capacity Imperatives for Domestic Resource Mobilization in Africa’ to understand the capacity gaps facing Africa in the area. Results show that the soft, societal, human and institutional capacity gaps to effectively generate savings and taxes domestically and effectively allocate them to productive activities remain glaring. The country capacity challenges are largely around weak tax administration, inefficient collection of tax, financial non-inclusiveness and illicit financial outflows. These challenges notwithstanding, achieving the continent’s domestic resource mobilization potential is possible as witnessed by successful country case studies.
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Notes
- 1.
The other remaining pillars of the Monterrey Consensus are attracting international resources flows; promoting international trade as an engine for development; international cooperation; sustainable management of the external debt, as well as debt relief efforts; and enhancing the coherence and consistency of the international monetary, financial and trading systems (United Nations 2002).
- 2.
http://www.au.int/en/about/vision (accessed on 18 September 2015).
- 3.
Remittances are not examined in this chapter. For further details, see ACBF (2015).
- 4.
Le et al. (2012).
- 5.
The country case studies were conducted in Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Madagascar, Mali, Morocco, South Africa, Togo, Uganda, Zambia and Zimbabwe.
- 6.
The Ghana Country Case Study notes that progress has been made in the broad areas of reform and initiatives undertaken by the Ghana Revenue Authority (GRA). In particular, administrative processes and procedures to ensure tax payer compliance have improved, tax evasion has been reduced and DRM has been enhanced. However, the case study also indicates that the pace of progress needs to be increased and there are challenges (for example staff of GRA are not well paid, informal sector is a major constraint and incomes are under reported) that remain to be addressed.
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Nnadozie, E., Munthali, T.C., Nantchouang, R., Diawara, B. (2017). Domestic Resource Mobilization in Africa: Capacity Imperatives. In: Biekpe, N., Cassimon, D., Mullineux, A. (eds) Development Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-54166-2_2
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