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Make Domestic Resource Mobilization Work for Africa’s Structural Transformation (By Adamon Mukasa and Anthony Simpasa)

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2 years ago

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African Development Bank

The implementation of the United Nations’ Agenda 2030 for sustainable development and the African Union’s Agenda 2063 hinges on Africa’s ability to mobilize sufficient and timely financial resources

ABIDJAN, Ivory Coast, August 27, 2024/APO Group/ — 

By  Adamon Mukasa and Anthony Simpasa

The implementation of the United Nations’ Agenda 2030 for sustainable development (https://apo-opa.co/4g2kWSb) and the African Union’s Agenda 2063 (https://apo-opa.co/4767Ak0) hinges on Africa’s ability to mobilize sufficient and timely financial resources. The recently released African Economic Outlook (AEO) 2024 (https://apo-opa.co/3yWpFEs) report by the African Development Bank estimates that the continent needs to close, by 2030, an annual financing gap of US$402.2 billion to fast-track its structural transformation process. Scaling up domestic resource mobilization (DRM) will be key to achieving that objective. 

African governments have always recognised the central role of increased mobilization and effective use of domestic resources to achieving sustainable development goals (SDGs) and other national development objectives. Through the 2015 Addis Ababa Action Agenda (https://apo-opa.co/4cG67ly), African leaders reaffirmed their commitment to “further strengthening the mobilization and effective use of domestic resources”, underscored by the principle of national ownership established in the Paris Declaration on Aid Effectiveness (https://apo-opa.co/3WZXZ9v). African governments have thus stepped up their policy levers towards improvement of DRM and combatting tax evasion and avoidance. These initiatives include, for example, the work of the African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) (https://apo-opa.co/3ARAhEU), the High-Level Panel on Illicit Financial Flows (IFFs) (https://apo-opa.co/4cK2efo), the African Union Assembly Special Declaration on IFFs (https://apo-opa.co/4g1ixXN), the Africa Initiative of the Global Forum on Transparency and Exchange of Information for tax purposes (https://apo-opa.co/4gfrvRJ), the African Tax Administration Forum (https://apo-opa.co/4dWXpA9), and the establishment of Medium-Term Revenue Strategies (MTRS) (https://apo-opa.co/3MjW4HY). These initiatives emphasize the need for mobilization of domestic resources at scale and addressing resource leakages. 

Scaling up resources to fast-track structural transformation in Africa will require addressing underlying challenges and constraints to domestic resource mobilization

Stocktaking of Africa’s DRM progress 
Africa has increasingly mobilized its domestic resources to finance its development priorities in sectors such as health and education, infrastructure development, industrialization, and agriculture. In absolute terms, Africa’s government revenues (tax and non-tax revenues, excluding grants) increased by almost 40 percent from about US$435 billion in 2015 to US$604 billion in 2022 and are projected to reach about US$626 billion in 2025. Tax revenues account for more than 75 percent of the continent’s total domestically generated revenues. However, in relative terms, the continent underperforms its peers. Data from the AEO 2024 indicate that Africa’s average general government revenue declined substantially from 23.5 percent of GDP in 2010 to 19.3 percent of GDP in 2021. This is due to a steady decline in tax revenues, over the same period, from 16.1 percent of GDP in 2010 to 14.2 percent of GDP in 2021. In particular, since 2015, Africa’s average tax revenue ratio relative to GDP has consistently been below the 15 percent minimum (https://apo-opa.co/3X4DYPi) required for a developing country to adequately finance its SDGs. Africa’s revenue ratio is well below the average for Latin America (23.9 percent) and less than half the average for Europe and Central Asia (31.7 percent). Africa’s average low tax revenue ratio mask significant heterogeneity among individual African countries. As shown in figure 2, the average tax-to-GDP ratio over 2015-2025 falls short of the 15 percent threshold in 34 countries, spread across all of Africa’s five regions, calling therefore for urgent actions to scale up DRM and align it with financing needs for structural transformation. 

Aligning DRM with financing needs for structural transformation 
According to findings in the AEO (2024), African countries need to increase their tax-to-GDP ratio by a median value of about 13.2 percentage points—bringing the current median ratio to 27.2 percent of GDP—to be able to close the estimated financing gap for structural transformation. This is under the assumption that additional mobilized tax revenues are efficiently deployed and allocated to financing structural transformation. While the estimated tax effort may be within reach of many African countries, it remains unattainable for others given their relative low potential tax-to-GDP ratio. Hence, out of the 39 African countries with data on tax capacity, the report found that in 18 countries (46.2 percent of them), the level of tax-to-GDP ratio required to mobilize resources for structural transformation exceeds the maximum amount of tax revenues that could be collected given socioeconomic and institutional factors (Figure 3). This means that even if those countries exhaust their current tax capacity, they may not be able to close their respective estimated financing gap by 2030. 

Scaling up resources to fast-track structural transformation in Africa will require addressing underlying challenges and constraints to domestic resource mobilization. These challenges  include inter alia: i) High levels of informality (about 86 percent of total jobs on the continent are informal) (https://apo-opa.co/3T4YKwQ); ii)  Weak tax administration capacities (https://apo-opa.co/4cKmfm3), leading to inefficient tax collection; iii) Complex tax law and rules, which reduce compliance rates; iv) Low domestic savings (prior to the pandemic, Africa had one of the lowest gross domestic savings rates in the world, at 13.6 percent of GDP)1; v)  Endemic corruption (https://apo-opa.co/4g2luaH) (Africa loses annually in IFFs about US$89 billion) (https://apo-opa.co/3MmfvzX); and vi) Inefficient and expensive tax collection systems. 

On the last point in particular, data suggest that between 2000 and 2021 African countries collected only 24 percent of the VAT revenues annually – the lowest rate in the world – that they could otherwise have collected with full compliance and without tax exemptions. The AEO (2024) report has therefore estimated that by just increasing the VAT efficiency ratio to the level currently achieved by high-performing developing countries in other regions—those with a VAT efficiency rate of at least 70 percent—African countries could raise their current median VAT revenues (as a share of GDP) by as much as 7.9 percentage points, equivalent to a median value of about US$1.9 billion. In aggregate terms, improving VAT efficiency ratio could translate into additional VAT revenues of US$171 billion (or 42.5 percent of Africa’s US$402.2 billion financing gap).    

There is a long way to go to make DRM work for Africa’s structural transformation. To move fast, policy priority should be given to improving the transparency of the tax system, widen the tax base, enhance enforcement, mitigate compliance risks, and ultimately stimulate voluntary compliance by strengthening the social contract via enhanced provision of public goods and services to address widespread implicit taxation and increase compliance; increasing non-tax revenues such as property income, royalties, fines, penalties, forfeits, and business permits; enhance the formalization of the informal economy and, digitalization of tax collection systems to curb corruption, thereby enhance revenue collection.  

Distributed by APO Group on behalf of African Development Bank Group (AfDB).

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PhotonPay Raises $40M Series C to Scale Its Stablecoin-Centric Financial OS

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3 hours ago

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October 30, 2026

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Financial OS

Led by Blockchain Capital, the funding will accelerate the expansion of PhotonPay’s stablecoin-centric Financial OS, connecting stablecoin liquidity with global fiat networks to unlock digital assets for everyday corporate operations and cross-border settlement.
HONG KONG SAR – Media OutReach Newswire – 29 October 2026 – PhotonPay today announced the closing of a $40 million Series C funding round led by Blockchain Capital, with participation from new investor SBI Group and follow-on investments from existing investors IDG Capital, GL Ventures, and Lightspeed Faction. Blacksheep Technology acted as exclusive financial advisor to PhotonPay on the transaction.

 




 
 

The new capital will support the expansion of PhotonPay’s stablecoin-centric Financial Operating System (Financial OS), with investment focused on enhancing multi-asset wallet capabilities, expanding global card issuing, strengthening local clearing infrastructure in key markets, and developing an agent-ready financial execution layer.

As of August 2026, PhotonPay’s annualized transaction volume reached US$65 billion. The company has secured 34 payment and financial licenses and regulatory authorizations across the Americas, Europe and Asia, and serves over 200,000 business customers across more than 200 countries and territories.

As stablecoins move beyond crypto-native use cases into corporate treasury, settlement and commercial spending, PhotonPay sees the next phase of global finance not as a choice between stablecoins and fiat currencies, but as the convergence of both. Its Financial OS connects on-chain liquidity with the banking, clearing and card networks businesses rely on for everyday operations.

“Moving money across borders in seconds means little if it still takes days to put that capital to work,” said Lewison Chen, Founder and CEO of PhotonPay. “Stablecoins are accelerating global money movement, while local clearing and global card issuing connect that liquidity to local settlement and everyday business spending. Our Financial OS brings these capabilities together, making the underlying infrastructure far less visible to businesses, even as it becomes more essential than ever.”

“At the same time, business software is becoming increasingly autonomous,” Chen added. “AI is shifting financial workflows from people manually operating fragmented tools toward systems that understand business intent and coordinate execution across assets, accounts and financial rails. That creates the foundation for agentic commerce. Stablecoins change how money moves. AI changes how it gets put to work. But commerce is still what money is for.”

Moving Money Across Assets and Markets

PhotonPay’s Financial OS brings together multi-asset wallets, global money movement, foreign exchange, local clearing, and global card issuing through an integrated API-first architecture. This unified system gives businesses access to the financial capabilities they need to manage and deploy funds across markets.

Stablecoins sit at the core of this architecture. PhotonPay’s multi-asset wallet connects stablecoin liquidity with fiat balances, integrating asset conversion, foreign exchange, and local clearing into a single connected workflow. This enables businesses to move funds across supported on-chain and traditional financial networks, turning digital asset liquidity into purchasing power for local payments and everyday corporate spending.

Supporting this dual-rail infrastructure is PhotonPay’s established global financial network. Businesses can open local collection accounts in 17 key markets and receive funds in more than 60 currencies. On the payout side, the network supports over 100 payment routes across local clearing systems, bank transfers, and digital wallets, including payouts to 74 major local e-wallets. Approximately 97% of payout transactions reach recipients within hours or on the same day, with 68% arriving in real time.

Global card issuing extends these capabilities into programmable business spending. Through PhotonPay’s APIs, businesses and platforms can issue virtual and physical cards, configure granular spending controls, and embed card payments directly into their software and automated workflows. Over the past 12 months, PhotonPay issued 4.4 million cards, up 275% YoY.

Beyond its first-party payment solutions, PhotonPay makes its infrastructure available through embedded finance, enabling technology platforms to natively integrate global accounts, payments, and card issuing into their own products. The company now serves more than 100 enterprise and platform partners, extending the reach of its Financial OS into industry-specific workflows.

From Financial Intent to Agentic Commerce

As AI agents assume active operational roles, financial infrastructure must evolve beyond API access to enable programmable, policy-governed execution. It requires systems capable of translating high-level instructions into coordinated financial actions, with deterministic controls governing how those actions are executed.

In May 2026, PhotonPay and Mastercard completed a live agentic payment demonstration using a tokenized PhotonPay card, validating AI-initiated transactions across existing global card networks.

Building on this milestone, PhotonPay is developing standardized financial interfaces designed for developers and AI agents. With planned support for the Model Context Protocol (MCP), PhotonPay aims to make account information, balances, card functions, and payments accessible as composable financial primitives, allowing AI agents to securely retrieve context and initiate financial workflows within defined authorization boundaries.

To govern this agent-ready layer, PhotonPay is developing a policy-based execution framework designed to enforce programmable authorization rules, spending limits, and transaction-level controls. The framework is intended to enable AI agents to coordinate financial tasks across supported accounts and assets, while ensuring that execution remains subject to explicit, enforceable policies set by businesses.

PhotonPay is also advancing its AI-assisted risk review capabilities, designed to identify complex cases for human assessment. Together, these initiatives reflect a foundational principle of autonomous finance: AI may interpret intent and coordinate tasks, but financial execution must remain governed by verifiable authorization, deterministic controls, and auditable records.

“Connecting financial networks is only the beginning. The real breakthrough is abstracting that complexity behind a unified, programmable financial layer, so businesses and AI agents can move from intent to execution within clearly defined boundaries,” said Chen.

Simple on the Surface, Deep by Design

The promise of a Financial OS is simplicity: enabling businesses to manage assets, route money, and execute payments through a unified financial operating layer. Yet delivering that simplicity requires deep financial infrastructure beneath the surface.

While stablecoins accelerate borderless value transfer, turning that liquidity into local settlement, supplier payments, and corporate spending still depends on established banking relationships, domestic clearing rails, foreign exchange infrastructure, and global card networks. Each market brings its own regulatory and operational requirements.

For PhotonPay, building a Financial OS means abstracting these fragmented global networks into a programmable, interconnected financial system. The objective is not to eliminate financial complexity, but to manage it within the underlying infrastructure, so businesses can operate without having to navigate these systems themselves.

“AI can simplify how businesses interact with financial services, but it cannot replace the infrastructure required to deliver them,” said JP Pi, Chief Compliance Officer at PhotonPay. “Establishing local financial capabilities takes years of investment, institutional partnerships, and regulatory engagement. Software or AI models alone cannot replicate that depth. The simplicity businesses experience is the result of that heavy lifting, not a substitute for it.”

PhotonPay has engineered a financial foundation spanning both stablecoin and fiat rails, connecting multi-asset conversion with local clearing networks. Institutional partnerships with J.P. Morgan, Standard Chartered, and DBS, alongside connections to domestic payment systems such as Brazil’s Pix and Mexico’s SPEI, form the backbone of this network.

The new capital will enable PhotonPay to strengthen its local clearing and compliance infrastructure in existing markets while expanding into new jurisdictions, scaling the reach of its Financial OS across corporate spending, embedded finance, and agentic commerce.

“Businesses want one provider that can handle their payments across currencies and markets, whether they’re using bank transfers, stablecoins or cards. Lewison and his team have spent a decade building the banking relationships, licenses and local payment infrastructure to deliver that. We believe PhotonPay’s ability to bring these capabilities together gives it a strong advantage as businesses adopt stablecoins for everyday payments.” – BCAP，Yuanhan Li，Partner

“As stablecoins become increasingly integrated into global payment systems, bridging digital assets with traditional financial infrastructure will be essential to unlocking their real-world potential. PhotonPay’s established global payment network and its vision for a stablecoin-centric Financial OS align closely with SBI Group’s strategy to advance digital financial infrastructure and expand the practical adoption of digital assets. We look forward to supporting PhotonPay’s continued growth and exploring opportunities for strategic collaboration across the SBI Group ecosystem.” – Eiichiro So, CEO & Managing Director of SBI Ven Capital
 




 

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Hainan economic, trade delegation visits Hong Kong for investment promotion, 2 cooperation memoranda signed

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4 hours ago

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October 30, 2026

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Hong Kong

HONG KONG SAR – Media OutReach Newswire – 29 October 2026 – From October 19 to 20, an economic and trade delegation from Hainan Province paid a visit to Hong Kong. The delegation signed memoranda of cooperation respectively withThe Chinese Manufacturers’ Association of Hong Kong (CMA)and the Federation of Hong Kong Industries (FHKI) to advance pragmatic cross-border collaboration between Hainan and Hong Kong in trade and investment, manufacturing industrial chains and professional services.

 




 
 

During its stay in Hong Kong, the delegation visited the CCPIT Representative Office in Hong Kong. It held discussions with CMA and co-hosted the Hainan Free Trade Port (Hong Kong) Economic and Trade Cooperation Exchange Meeting with FHKI. The event showcased the policies, key industrial layout and investment opportunities of the Hainan Free Trade Port (FTP), and arranged one-on-one business matchmaking between Hainan and Hong Kong enterprises.

Wang Yuyuan, Vice President of the China Council for the Promotion of International Trade Hainan Sub-council (CCPIT Hainan) and China Chamber of International Commerce Hainan Chamber of Commerce, noted that since the official launch of island-wide special customs operations at the Hainan FTP on December 18, 2025, 174,000 new enterprises have been registered, representing a year-on-year surge of 95.9 percent. Newly established foreign-invested enterprises rose by 35.8 percent year on year. In the first half of this year, inbound and outbound tourist arrivals exceeded 70 million, up 28 percent year on year, with the number of visa-free entry countries expanding to 88. From January to August, the province’s total goods import and export volume hit 250 billion yuan, growing by 61.5 percent year on year. Hainan is rapidly emerging as a critical gateway connecting China with the rest of the world and a prime channel for two-way investment.

According to CCPIT Hainan, Hong Kong ranks as a major source of foreign investment for Hainan. In the first half of this year, Hainan registered 1,303 new foreign-invested enterprises, an increase of 38.62 percent year on year, with Hong Kong-funded enterprises accounting for the lion’s share. Hainan has issued offshore RMB local government bonds in Hong Kong for four consecutive years, with a cumulative issuance volume reaching 18 billion yuan.

CMA is one of Hong Kong’s most representative non-profit industrial and commercial bodies, with around 3,000 member enterprises. It has long provided members with business services including exhibitions, brand promotion, testing and certification. FHKI, one of Hong Kong’s four major chambers of commerce, has approximately 2,000 corporate members. It focuses on boosting the sustained development of Hong Kong industry and manufacturing through policy advocacy, business matchmaking, certification services and youth talent cultivation.

The two memoranda explicitly stipulate that the two sides will establish a regular liaison mechanism, build a long-term cooperation platform covering information sharing, business matchmaking, exhibition collaboration and professional services, and provide solid support for pragmatic business cooperation between Hainan and Hong Kong enterprises.

Source: China Council for the Promotion of International Trade Hainan Provincial Committee (CCPIT Hainan)

 
 




 

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Africa gains governance momentum in the 2026 Chandler Good Government Index, but sustaining progress is the real test

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21 hours ago

on

October 29, 2026

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Africa

Across Africa, average scores improved in six of the seven CGGI pillars over the past year, with the strongest gains in Helping People Rise and Financial Stewardship

This signals that stronger government capabilities are beginning to translate into tangible improvements in people’s lives

KIGALI, Rwanda, October 29, 2026/APO Group/ –Africa was the second best-performing region for governance progress in the 2026 Chandler Good Government Index (CGGI), with 71% of the African countries assessed in both 2025 and 2026 achieving higher overall scores. However, the continent remains the lowest-scoring region overall, highlighting the challenge of translating improvement in government capabilities into better outcomes for citizens.

 




 
 

These findings were highlighted by the Chandler Governance Group (CGG) at a joint session with the Rwanda Governance Board (RGB) to launch the 13th edition of the Rwanda Governance Scorecard at the Kigali Serena Hotel on Thursday, 22 October 2026.

“This year, Africa’s strongest gains came in Financial Stewardship, followed by Helping People Rise, the CGGI’s outcomes pillar. This signals that stronger government capabilities are beginning to translate into tangible improvements in people’s lives, from access to quality education and healthcare to the public finances that fund them. The task now is to sustain that progress over the coming years,” says Dinesh Naidu, Director (Knowledge) at CGG.

Now in its sixth edition, the CGGI assesses government capabilities and effectiveness across 133 countries representing 94% of the world’s population, up from 120 countries in 2025. It measures 35 equally weighted indicators across seven pillars, providing governments with a framework to benchmark performance, identify gaps and learn from the experience of other countries.

Globally, the findings point to improving governance performance. Of the 120 countries assessed in both 2025 and 2026, 61% recorded higher scores, representing the highest annual share of countries improving since the Index launched in 2021. However, longer-term progress has been less consistent, with only 43% of the 104 countries tracked since 2021 recording an overall improvement.

Africa’s leading governments

Mauritius remains Africa’s highest-ranked country, placing 55th globally, followed by Rwanda (62nd), Botswana (70th), Morocco (79th) and Tanzania (80th). South Africa ranks sixth on the continent, in 85th place globally.

Rwanda features prominently in the discussion, ranking 11th globally for Leadership & Foresight and emerging as the highest-ranked low-income country in the Index. It ranks 61 places above where its income alone would predict. Across the Index, government capabilities track citizen outcomes more closely than national wealth does, suggesting that strengthening government capabilities matter in delivering better outcomes for citizens.

The joint session brings together the CGGI’s international benchmarks and the Rwanda Governance Scorecard’s assessment of governance in the Rwandan context, creating an opportunity to consider both global perspectives and country-specific priorities.

Progress across key governance pillars

Across Africa, average scores improved in six of the seven CGGI pillars over the past year, with the strongest gains in Helping People Rise and Financial Stewardship. These improvements point to progress in areas associated with public services, including healthcare and education, as well as the management of public finances.

Longer-term trends also highlight areas of progress. Between 2021 and 2026, nearly every African country assessed across the period improved its Data Capability score, with Morocco recording the largest gains. Ghana’s overall score improved in 2026, supported by stronger Financial Stewardship, while South Africa continues to show relative strength in Robust Laws & Policies, ranking 44th globally, and Attractive Marketplace, ranking 48th.

Despite these gains, the scale of the challenge remains clear. Africa’s regional average is still below its 2021 level, 23 of the 35 African countries in the 2026 Index rank outside the global top 100, and none is in the top 50. Seven African countries joined the Index this year: Chad, the Democratic Republic of Congo, Gambia, Guinea, Lesotho, Liberia and Togo.

“Rankings provide a useful starting point, but the broader value of the CGGI lies in helping governments understand where they are making progress and where further work is needed. Sustained improvements depend on the ability to strengthen institutions, manage resources responsibly and turn policy into meaningful outcomes for citizens,” says Naidu.

A tool for learning and improvement

The CGGI is designed as a practical diagnostic tool, helping governments identify gaps, track progress over time, and learn from peers facing similar constraints. The collaboration with the RGB brings international benchmarking together with locally grounded assessment.

“Every country faces its own governance challenges and is driven by varying priorities. Governments that are willing to take stock of the evidence and learn from peers to strengthen their institutions are well placed to achieve real improvements,” concludes Naidu.

Distributed by APO Group on behalf of Chandler Governance Group.

 

 




 

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