The Ministerial Segment of the UN Economic Commission for Africa’s (ECA) flagship Conference of Ministers is meeting in Marrakech, Morocco, with the digital transformation of the continent high on the agenda.
Experts have been covering various pertinent issues in the past few days ahead of the two-day 52nd session of the Economic Commission for Africa’s Conference of African Ministers of Finance, Planning and Economic Development.
Egypt’s Minister for Finance, Mohamed Maait, shed light on key reforms in his country.
He noted that, among others, non-sovereign tax revenues is picking up, targeting an increase of 0.5 per cent of GDP in the next fiscal year.
A significant fiscal consolidation is ongoing driven by long-lasting reforms on revenues and expenditure sides,” Maait said
The theme for this year’s Conference of Ministers is: "Fiscal policy, trade and the private sector in the digital era: a strategy for Africa”.
Ethiopia’s Minister for Finance, Ahmed Shide, backed his Egyptian counterpart on the importance of digital transformation. Shide, noting challenges that include a low capacity in the use of technology.
Vera Songwe, the Under-Secretary-General of the United Nations and Executive Secretary of the Economic Commission for Africa, reiterated that the meeting’s theme provides the context for participants to deliberate on three topical issues of concern for all member countries today, namely resource mobilisation, job creation and inclusive growth.
She added: "It also focuses our thoughts on the opportunities offered by rapid digitisation to address these pertinent issues.”
Africa faces a huge and rising financing gap that is impeding its efforts to foster development, Songwe said.
The infrastructure gap, which is a major constraint to improving productive capacity, is estimated to be between $130 billion and $170 billion annually, of which the continent raises approximately 50 per cent.
She explained that for Africa to achieve the goals set forth in the 2030 Agenda, its incremental financing needs are estimated to range between $614 billion and $638 billion per year.
Funds needed to implement the 2030 Agenda in low-income countries and lower middle-income countries total $1.2 trillion per year. This all translates into an estimated 11 per cent of GDP between 2015 and 2030.
Songwe said: "Notwithstanding this huge financing gap, African countries have the potential to increase government revenue by between 12 and 20 per cent of GDP by adopting appropriate fiscal policies.”
Amel Saidane, president of Tunisia Startups, said that African countries might consider learning from the incremental changes Europe went through.
"The biggest challenge for fintech companies today is regulation policy and the fact that many central banks do not innovate and do not understand what it takes to scale and build a technology company,” said Johnson Ombola, Senior Partner at TL Capital commented at the conference.
Currently Africa has 167 million internet users, predominately youth, who are using the internet as a tool for growth, explained Ghita Wissad, who is representing the Youth Alliance for Leadership and Development in Africa, (YALDA).
By and large, consensus from most delegates is that Africa’s potential tax base is huge and if it could get this right, the continent would not require external aid.
Issues that need to be addressed, it is agreed, include tackling tax avoidance and evasion and stemming the illicit flow of money out of Africa, which costs the continent an estimated $73 billion annually.
editor@newtimesrwanda.com