Public Resource Mobilization and Aid in Africa

The global economic crisis has given a new impetus to dialogue on domestic resource mobilization in Africa. Lower export revenues, uncertain future foreign investment and aid inflows amidst generally high levels of indebtedness have raised the importance of increasing domestic resources. Africa faces three types of challenges with respect to mobilizing additional public resources: structural bottlenecks; an unbalanced tax mix; and the erosion of existing tax bases by excessive granting of tax preferences, inefficient taxation of attractive activities and an inability to fight transfer pricing by multinational enterprises.