The African Development Bank (AfDB) has urged African governments to unlock domestic resources to finance their own development, saying that, Africa needs over $1.3 trillion annually to achieve its development goals by 2030, yet many countries on the continent still rely heavily on foreign aid and loans.
It said with the continent’s average tax-to-GDP ratio sitting at just 16% far below the 34% average among OECD nations, the gap highlights not just low rates, but weak systems, poor enforcement, and vast informal economies.
The AfDB estimates that over $88 billion is lost annually to illicit financial flows, money that could otherwise fund essential infrastructure like roads, schools, and hospitals.
To reverse this trend, the Bank recommends that countries modernize their tax systems, adopt digital tools, and close revenue loopholes.
It said underutilized sources like property and land taxes offer significant untapped potential.
Additionally, national pension funds and savings could be redirected to support long-term investments in energy, transportation, and other key sectors.
However, domestic resource mobilization must be rooted in fairness and transparency. Citizens are more likely to comply with tax obligations when they see improvements in public services and trust that funds are used effectively, adding that, combating corruption and strengthening governance remain central to building this trust.
The AfDB argues that achieving financial independence is not only about securing funds, it’s about reclaiming control over development priorities.
“When African nations rely less on donors, they gain the freedom to make decisions that align with their national interests and long-term stability,” the bank said.
Nonetheless, with the right mix of strong institutions, smart investments, and political will, Africa can reduce its dependence on debt and aid, build a resilient and self-financed future.
