Mahama Urged African Leaders to Prioritize Tax Compliance to Bridge $402 Billion Financing Gap

President John Dramani Mahama has issued a clarion call to African Heads of State, urging them to prioritize tax compliance as a critical step towards addressing the continent's substantial financing gap.  Speaking at the African Union (AU) Commission headquarters on February 16th, during a Heads of State and Government breakfast dialogue, Mahama, serving as Champion on African Union Financial Institutions, highlighted the staggering estimated annual financing gap of $402 billion facing Africa until 2030.

 

Mahama emphasized that bridging this gap necessitates a multi-pronged strategy, with domestic resource mobilization playing a pivotal role.  He stressed the importance of enhancing tax administration, combating illicit financial flows, and fostering a culture of tax compliance among citizens and businesses.  This, he argued, is crucial for unlocking the continent's economic potential.

 

Beyond the financial shortfall, Mahama acknowledged the multifaceted challenges confronting Africa, including climate change, geopolitical instability, and disease outbreaks, all of which pose significant threats to sustainable development. He advocated for strategic investments in key sectors such as health, education, energy, and technology to mitigate these risks and drive progress.

 

"This financing gap is not merely a statistic," Mahama stated. "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."

 

Echoing Mahama's concerns, World Trade Organization (WTO) Director-General Dr. Ngozi Okonjo-Iweala urged African leaders to adopt a more sustainable approach to financing development.  She called for a reduction in reliance on borrowing and a shift towards innovative strategies to attract and retain investments.

 

"We must take advantage of investment that comes to Africa and be able to sustain them for our own development," Dr. Okonjo-Iweala said.  She suggested exploring avenues such as value addition to natural resources and leveraging pension funds to generate patient capital for long-term development projects.

 

The dialogue underscores the urgent need for African nations to adopt comprehensive strategies to address their financing challenges.  The emphasis on tax compliance, alongside innovative investment strategies, represents a crucial step towards unlocking the continent's vast potential and ensuring a brighter future for its citizens.