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

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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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Nigeria’s Upstream Reform Program Captures 40% of Africa’s Final Investment Decision (FID) Activity After a Decade on the Margins

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May 8, 2026

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A government three-year review documents how executive action under President Tinubu reversed a decade of upstream decline

JOHANNESBURG, South Africa, May 8, 2026/APO Group/ –Nigeria has gone from capturing 4% of Africa’s upstream final investment decisions (FIDs) to commanding 40% in two years, according to Nigeria’s Energy Sector Reforms 2023-2026: A Three-Year Review, published by the Office of the Special Adviser to the President on Energy and spearheaded by Special Adviser Olu Verheijen. The $50 billion project pipeline now in development beyond 2026 points to sustained capital commitment at a scale not seen in the Nigerian upstream for at least a decade.

 

Between 2014 and 2023, Nigeria was among the continent’s weakest performers for upstream FIDs despite holding 37.5 billion barrels of proven oil reserves, the second-largest endowment in Africa. Algeria captured 44% of African upstream FIDs during that period, Angola held 26%, while Nigeria trailed Mozambique, Ghana, Senegal and Namibia. In the third quarter of 2022, crude production briefly dropped below one million barrels per day, as years of underinvestment, pipeline vandalism and regulatory ambiguity compounded each other. However, reforms instituted by Nigeria’s President Bola Tinubu have dramatically turned this trend around. Through deliberate and coordinated steps, the government has reset the trajectory.

Addressing Fiscal Terms, Regulatory Scope and Contracting Speed

President Bola Tinubu’s administration moved simultaneously on fiscal terms and regulatory architecture. Policy directives in 2023 clarified the boundary of jurisdiction between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), resolving an ambiguity that had complicated project sanctioning. Presidential Directive 40 introduced targeted tax incentives, and a separate Notice of Tax Incentives for Deep Offshore Production in 2024 was designed to draw international oil companies (IOCs) back into capital-intensive, long-cycle deepwater projects. The VAT Modification Order 2024 and Upstream Cost Efficiency Order 2025 addressed the cost structures that had rendered marginal projects uneconomic. NNPCL contracting timelines were compressed from 36 months to a maximum of six months.

Four Divestments Transferred Onshore Control to Indigenous Operators

In parallel, the administration deployed targeted security directives and accelerated ministerial consents for four IOC asset transfers. Renaissance acquired Shell’s onshore portfolio. Seplat Energy completed its acquisition of ExxonMobil’s Nigerian upstream interests. Oando took over from Agip, and Chappal acquired Equinor’s local assets. The four transactions totaled approximately $4 billion. The transfer of onshore and shallow-water blocks to indigenous operators contributed directly to production recovery. Output rose by approximately 400,000 barrels per day between 2023 and 2025 to reach 1.6 million barrels per day, the highest onshore production level in 20 years.

When a government rebuilds fiscal competitiveness and regulatory predictability at the same time, capital responds

Signed Projects Total $10 Billion, With a $50 Billion Pipeline Beyond

The reforms produced a concrete FID response from Shell and TotalEnergies. Shell Nigeria Exploration and Production Company (SNEPCo) sanctioned the $5 billion Bonga North deepwater development in December 2024 and committed a further $2 billion to the HI Non-Associated Gas (NAG) project. TotalEnergies and NNPCL took a joint FID on the $550 million Ubeta gas field development in June 2024.

Together those three commitments account for more than $10 billion in signed investment after a decade of near-zero sanctioning activity. The pipeline beyond 2026 spans a further $50 billion across 11 projects including Bonga South West, Owowo, Usan and Erha. Nigeria approved 28 field development plans valued at $18.2 billion in 2025 alone, targeting an estimated 1.4 billion barrels of reserves.

“When a government rebuilds fiscal competitiveness and regulatory predictability at the same time, capital responds,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “Nigeria has done both, and the FID numbers are concrete proof.”

The Counterfactual Illustrates How Much Was at Stake

The presentation includes a no-reform projection that puts the gains in context. Without intervention, total crude and condensate production was on track to fall from 1.371 million barrels of oil equivalent per day in 2022 to 579,000 by 2030. Under the reform trajectory, output reached 1.77 million barrels of oil equivalent per day in 2026, with a stated government target of 3 million barrels per day. Export gas utilization rose 39% over the same period, while domestic utilization grew by 7%.

The durability of these gains will be tested by two factors: whether the institutional architecture put in place under the Tinubu administration holds over the long term, and whether the deepwater commitments signed in 2024 and 2025 advance to execution on schedule. The project pipeline is large enough that partial delivery would still represent a generational shift in Nigeria’s upstream output profile.

 

Distributed by APO Group on behalf of African Energy Chamber.

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Angola Strengthens Global Investment Drive Across Oil, Gas and Mineral Resources

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May 8, 2026

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With sweeping reforms across the extractive sector, Angola is entering a new phase defined by transparency, regulatory modernisation, value addition, and international partnership

LONDON, United Kingdom, May 8, 2026/APO Group/ –At a defining moment in Angola’s economic transformation, the Critical Minerals Africa Group (CMAG) (https://CMAGAfrica.com), together with the Government of Angola and the Ministry of Mineral Resources, Petroleum and Gas of the Republic of Angola (MIREMPET), will convene global investors, policymakers, and industry leaders in London for the Angola Oil, Gas & Mining Investment Conference on 14 May 2026.

 

More than a conference, this gathering represents a strategic international engagement at a time when Angola is actively reshaping its economic future and positioning itself as one of Africa’s most compelling destinations for long-term investment in natural resources, infrastructure, and industrial development.

With sweeping reforms across the extractive sector, Angola is entering a new phase defined by transparency, regulatory modernisation, value addition, and international partnership. The country’s leadership is sending a clear message to global markets: Angola is open for investment and ready to build transformational partnerships that support sustainable growth and economic diversification.

This is not simply about resource development, it is about building long-term industrial growth, strengthening energy and mineral supply chains, and shaping Angola’s future

The event will be headlined by H.E. Diamantino Azevedo, Minister for Mineral Resources, Oil and Gas of Angola, whose leadership since 2017 has been central to advancing Angola’s mineral and hydrocarbons agenda. Under his stewardship, Angola has accelerated institutional reform, strengthened governance frameworks, promoted private sector participation, and prioritised sustainable resource development.

As global demand intensifies for critical minerals, energy security, and resilient supply chains, Angola is uniquely positioned to become a strategic partner to international investors and industrial economies. The country’s vast untapped mineral wealth, significant oil and gas reserves, expanding infrastructure ambitions, and commitment to economic diversification present a rare investment window for global stakeholders.

Speaking ahead of the event, Veronica Bolton Smith, CEO of the Critical Minerals Africa Group said:

“Angola stands at a pivotal point in its national development. The reforms taking place across the country’s extractive sectors are creating unprecedented opportunities for responsible international investment and strategic partnership. This is not simply about resource development, it is about building long-term industrial growth, strengthening energy and mineral supply chains, and shaping Angola’s future as a globally competitive investment destination. We believe this moment represents one of the most important opportunities for international partners to engage with Angola’s leadership and participate in the country’s next chapter of economic transformation.”

The event is expected to attract a distinguished international audience, including sovereign representatives, institutional investors, mining and energy executives, infrastructure developers, development finance institutions, and strategic partners seeking direct engagement with Angola’s leadership.

Distributed by APO Group on behalf of Critical Minerals Africa Group (CMAG).

 

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The Islamic Development Bank (IsDB) Group Successfully Concludes Private Sector Roadshow in Baku

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May 8, 2026

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Bringing together a diverse range of stakeholders, the Forum showcased IsDB Group services, activities, and initiatives across its 57 member countries, with particular emphasis on Azerbaijan

BAKU, Azerbaijan, May 7, 2026/APO Group/ –The Islamic Development Bank Group (IsDB) affiliates (www.IsDB.org) – namely the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the Islamic Corporation for the Development of the Private Sector (ICD), and the International Islamic Trade Finance Corporation (ITFC) – in cooperation with the Islamic Development Bank Group Business Forum (THIQAH), organized the “IsDB Group Private Sector Roadshow” in Baku, Azerbaijan, in close collaboration with the Ministry of Economy of the Republic of Azerbaijan and the Export and Investment Promotion Agency of the Republic of Azerbaijan (AZPROMO).

 

The high-profile event which took place on Thursday, 7th May 2026, at Azerbaijan’s Ministry of Economy, came as part of ongoing preparations for the upcoming IsDB Group Annual Meetings and Private Sector Forum (PSF 2026), scheduled to take place from 16 to 19 June 2026, under the high patronage of His Excellency President Ilham Aliyev, the President of the Republic of Azerbaijan.

 

Bringing together a diverse range of stakeholders, the Forum showcased IsDB Group services, activities, and initiatives across its 57 member countries, with particular emphasis on Azerbaijan. It highlighted the Group’s ongoing support for private sector development and its efforts to stimulate promising investment and trade opportunities in the Azerbaijani market.

 

The event also served as a unique opportunity inviting the audience to participate actively in IsDB Group Annual Meetings and the Private Sector Forum (PSF 2026). The program included panel discussions and specialized workshops on ways to enhance economic partnerships and the role of IsDB Group’s institutions in supporting the needs of member countries. The spectra of services, solutions and financial tools were also presented, including lines and modes of Islamic financing, trade finance and trade development solutions, corporate private sector financing, as well as risk mitigation solutions plus investment insurance and export credit insurance services.

 

Keynote speakers, in their speeches, underlined strong commitment to deepening engagement with the private sector and fostering meaningful partnerships that drive sustainable economic growth in light of the upcoming IsDB Group Annual Meetings in Baku, all to showcase integrated solutions especially in Islamic finance, trade, investment, and risk mitigation while working closely and collectively with private sector partners to unlock new opportunities, support innovation, and empower businesses contributing to inclusive and resilient development across IsDB Group member countries.

Distributed by APO Group on behalf of Islamic Development Bank Group (IsDB Group).

 

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