Domestic Revenue Mobilization (DRM) for Enhanced Fiscal Stability and Resilience in Africa
African countries face multiple challenges in the sustenance of fiscal stability. These include inadequate domestic revenue mobilisation, corruption and illicit financial flows, increasing debt vulnerabilities and lack of prudence in the use of debt resources, shrinking development aid, rising economic and social burden from regional and global geopolitical tensions, the legacy fiscal impact of the COVID-19 pandemic, and low capacity for the management of public resources. In addition, African countries also suffer setbacks from domestic shocks associated with the environment, insecurity, and conflict that tend to exacerbate fragility across the continent. These significantly constrain the countries' ability to meet the huge financing requirements to achieve their Sustainable Development Goals (SDGs) by 2030, the AU Agenda 2063 and other development aspirations. For instance, the African Development Bank estimates that the continent will need about US$1.3 trillion a year, an equivalent of 42 percent of its 2023 GDP of US$3.1 trillion (AEO 2023) to achieve the SDGs by 2030. This is besides the US$130 billion to US$170 billion needed annually to finance the infrastructure deficit with an annual financing gap of $68-108 billion, and climate change adaptation projected to cost the continent at least $50 billion annually by 2050. Besides, the COVID-19 pandemic is estimated to cost the continent about US$ 484 billion between 2021 and 2023 to adequately address its aftermath and to support recovery.
