AfDB
The African Development Bank (AfDB), says Nigeria can significantly increase domestic capital mobilisation through stronger public finance management and improved governance.
Prof. Kevin Urama, Chief Economist/Vice President for the Economic Governance and Knowledge Management of the AfDB, said this in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
Urama emphasised that domestic resources mobilisation remained the largest source of development financing, far exceeding external financial flows.
According to him, stable macroeconomic policies, efficient public finance management and stronger institutions are critical to attracting long-term investments and encouraging voluntary tax compliance.
“Investing in improving economic governance and macroeconomic policy environment encourage citizens to pay taxes. It improves the social contract between citizens and government,” he said.
The AfDB chief economist said better management of public resources, reduced leakages and stronger debt sustainability frameworks which would increase confidence in government and expand the tax base.
He noted that Africa could raise an additional 469 billion dollars annually through improved domestic resources mobilisation without increasing tax rates.
Urama added that the continent could also generate about 311.6 billion dollars annually in non-tax revenues by adopting best practices in revenue administration.
He said that Nigeria and other African countries should focus on improving transparency, accountability and public service delivery to strengthen trust between governments and citizens.
According to him, greater tax compliance and improved collection of non-tax revenues would provide governments with more resources to finance development priorities and reduce dependence on the external borrowing.
“Money is like water. If you have a good pond that is not leaking, whenever there is rain, you will collect water and it will remain for you for a longer time,” he said.(NAN)
