African leaders and tax experts have renewed calls for urgent, coordinated action to tackle illicit financial flows (IFFs) and strengthen domestic resource mobilisation (DRM), warning that the continent's fiscal stability and development prospects remain at risk without decisive reforms.
At the 5th session of the Sub-Committee on Tax and Illicit Financial Flows under the Special Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration (STC-FMAEPI) in Abuja, Nigeria's Minister of State for Finance, Taiwo Oyedele, and Executive Director of the Tax Justice Network Africa, Chenai Mukumba, delivered a unified message: Africa must move beyond rhetoric and embrace bold, practical reforms to secure its economic future.
Their remarks, delivered at the closing session of the high-level gathering, underscored growing consensus across the continent that plugging revenue leakages and improving tax systems are central to reducing dependence on debt and external financing.
Oyedele painted a stark picture of Africa's fiscal outlook, noting that rising debt burdens and structural deficits are increasingly constraining governments' ability to fund critical development priorities.
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He warned that failure to mobilise domestic resources would deepen fiscal vulnerabilities, leaving countries exposed to external shocks and limiting investments in infrastructure, healthcare, and education.
According to him, illicit financial flows represent one of the most significant threats to Africa's economic stability, draining resources that could otherwise be deployed for development. "Every naira, every shilling, every rand, every dollar lost to illicit financial flow is a school not built, a hospital not equipped, and a job not created," he said.
The minister stressed that the issue goes beyond taxation, describing IFFs as a broader governance challenge that reflects weaknesses in institutional coordination, transparency, and enforcement.
Beyond Taxation: A Governance Imperative
Oyedele argued that tackling illicit financial flows requires a comprehensive, multi-layered approach that strengthens institutions and promotes accountability.
He called for the establishment of robust beneficial ownership registers to improve transparency in corporate structures, noting that opaque ownership systems often enable tax evasion and financial crime.
Prof. Oyedele also emphasised the need for stronger cross-border cooperation among African countries to track and curb illicit flows, pointing out that fragmented systems allow capital to move undetected across jurisdictions.
The minister highlighted the critical role of data in modern tax administration, urging governments to deploy technology-driven systems that enhance compliance and improve enforcement outcomes.
"Enforcement mechanisms must be credible and consistent," he said, stressing that weak or uneven application of tax laws undermines public trust and compliance.
A major focus of Oyedele's remarks was the growing importance of the digital economy and its implications for taxation.
He warned that African countries risk losing significant revenue if they fail to assert their taxing rights in the evolving global digital landscape, where value creation increasingly transcends physical borders.
To address this, he called for increased investment in digital tax administration systems and capacity building, alongside active participation in global tax negotiations.
The minister urged African countries to engage strategically in multilateral platforms shaping international tax rules, ensuring that the continent's interests are adequately represented. "Africa must not remain a passive participant in global value creation," he said.
Oyedele identified fragmentation in tax policies, incentives, and treaty negotiations as a major constraint on Africa's fiscal potential.
He argued that lack of coordination among countries leads to harmful tax competition, erodes the tax base, and weakens collective bargaining power in global negotiations.
The minister pointed to the African Continental Free Trade Area as a critical opportunity to align fiscal systems with broader economic integration goals.
However, he cautioned that trade integration without policy coordination would fail to deliver meaningful outcomes.
"Economic integration must be matched with fiscal alignment," he said.
To address these challenges, Oyedele outlined three key priorities for African countries.
First, he called for strengthening domestic tax systems through investment in administration, digitisation, and human capacity development.
Second, he urged deeper collaboration among countries and institutions to foster a unified approach to tax policy and enforcement.
Third, he emphasised the importance of sustained commitment to reform, even in the face of political and economic constraints. "Reform is not optional. It is the seed for progress," he said, stressing that long-term development depends on consistent and disciplined implementation.
He added that fiscal strength is not only about revenue generation but also about sovereignty, economic resilience, and sustainable development.
Echoing similar concerns, Mukumba stressed that while dialogue remains important, Africa must now prioritise execution.
She noted that platforms such as the STC-FMAEPI provide a unique opportunity to translate policy discussions into actionable reforms at both continental and national levels. "We must move from dialogue to execution," she said, calling for clear timelines, accountability mechanisms, and country-level implementation frameworks.
Mukumba emphasised the need for reforms agreed at the continental level to be adapted to national contexts, ensuring alignment with local realities and development priorities.
Highlighting practical tools already developed, Mukumba pointed to the anti-IFF policy tracker, a collaborative initiative involving the African Union and the African Tax Administration Forum.
The tool has been piloted in several countries, including Namibia, Uganda, Ghana, Côte d'Ivoire, and Liberia, providing insights into institutional readiness and gaps in combating illicit financial flows.
According to her, the initiative demonstrates the value of African-led solutions tailored to the continent's unique challenges.
She called for expansion of the policy tracker across more countries, noting that it offers a framework for measuring progress and identifying areas for improvement.
Mukumba also underscored the importance of investing in data systems, verification processes, and administrative capacity within tax authorities. "These are critical to closing the gaps that allow illicit financial flows to persist," she said.
Digitalisation: Challenge and Opportunity
Like Oyedele, Mukumba highlighted the transformative impact of digitalisation on taxation.
She described the digital economy as both a challenge and an opportunity, noting that while it complicates traditional tax systems, it also offers tools to improve compliance and enforcement.
African countries, she said, must leverage technology to strengthen tax administration and enhance data-driven decision-making.
This includes using digital platforms to track transactions, improve transparency, and reduce opportunities for tax evasion.
Africa's Voice in Global Tax Reform
Mukumba drew attention to ongoing negotiations on international tax cooperation under the United Nations, describing them as a "historic moment" for Africa.
She urged African countries to actively participate in these discussions, ensuring that global tax rules reflect the continent's realities and development needs.
"African priorities must be reflected, not merely accommodated," she said.
She emphasised the need for coordinated positions among African countries, backed by strong technical support for negotiators.
Mukumba also stressed that global tax reforms should support Africa's development rather than constrain it, aligning with the continent's long-term goals under frameworks such as Agenda 2063.
Leveraging Continental Institutions
Both speakers highlighted the importance of leveraging existing African institutions to drive reforms.
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Mukumba pointed to the role of the African Union Commission, regional economic communities, and other bodies in supporting tax policy coordination and capacity building.
However, she warned that fragmentation among institutions could undermine progress, calling for stronger collaboration and knowledge sharing. "No country can address today's tax challenges in isolation," she said.
Aligning Tax Policy with Development Goals
In her concluding remarks, Mukumba called for a broader rethinking of taxation in Africa.
She argued that tax policy should not be seen solely as a revenue-generating tool but as a strategic instrument for economic transformation.
This includes aligning tax systems with industrialisation goals, investment strategies, and regulatory frameworks.
According to her, well-designed tax policies can incentivise productive investment, discourage harmful practices, and support sustainable growth.
The convergence of views from both Oyedele and Mukumba reflects a growing recognition that Africa's development hinges on its ability to mobilise domestic resources effectively and curb illicit financial flows.
Their calls for stronger institutions, better coordination, and sustained reform resonate with broader efforts by governments, including Nigeria, to improve tax compliance and reduce revenue leakages.
As fiscal pressures mount and global economic uncertainties persist, the urgency of these reforms cannot be overstated.
The message from Abuja was clear: Africa has the tools, the institutions, and the knowledge to address its tax challenges.
What is needed now is the political will to act -- decisively and collectively.
If implemented effectively, the reforms outlined at the STC-FMAEPI meeting could mark a turning point in the continent's quest for fiscal sovereignty, economic resilience, and sustainable development.
