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An image showing bank notes and a calculator to refer to tax

What Influences Tax Rates in Sub-Saharan Africa?

The Addis Ababa Agenda for financing development pays special attention to domestic revenue mobilization to help finance the Sustainable Development Goals (SDGs) in developing countries. In the case of sub-Saharan African countries, much of the discussion has centered on improving their overall revenue performance, and while they have, there is still a long way to go.

Chart showing estimates for additional spending by 2030

Tax Revenues in Africa Will be Insufficient to Finance Development Goals

The IMF estimates that on average, low-income countries (LIC) will need additional resources amounting to 15.4 percent of GDP to finance the Sustainable Development Goals (SDGs) in education, health, roads, electricity, and water by 2030. These resource requirements are even greater in sub-Saharan Africa than in a typical LIC: the median sub-Saharan African country faces additional spending of about 19 percent of GDP. In the average LIC, the IMF estimates that of the required additional financing, 5 percentage points of GDP would have to come from domestic taxes.

Image of multiple banknotes for international taxation

Sub-Saharan Africa and International Taxation: Time for Unilateral Action?

While sub-Saharan African (SSA) countries have made some progress in collecting more taxes domestically in the last 20 years, international tax issues remain a significant concern for these and other developing countries, reflecting aggressive tax planning by multinational enterprises (MNEs) and the international initiatives designed by G20-OCED countries in response. Drawing on a new CGD paper on international taxation and developing countries, we argue here that the time has come for SSA countries, and developing countries in general, to take unilateral action.