ACCRA/TUNIS — Africa could unlock nearly $700 billion for productive investment by tightening the net on tax evasion, corruption, and illicit financial flows (IFFs), according to remarks by Dr. Patrick Ndzana Olomo of the African Union Commission at the Fifth African Conference on Debt and Development (AfCoDD V). With official aid waning and borrowing costs elevated, the next decade must be about domestic resource mobilisation, transparency, and building value-added economies rather than exporting raw commodities.
The scale of the problem
The headline figure lands against a stark backdrop. The United Nations Conference on Trade and Development (UNCTAD) estimates that $88.6 billion leave Africa each year as illicit flows—roughly 3.7% of the continent’s GDP. Cutting IFFs could almost halve Africa’s roughly $200 billion annual SDG financing gap, underscoring why anti-evasion measures have become a first-order development priority.
What’s working already: transparency is paying off
The numbers show momentum. African tax authorities reported nearly €400 million in additional revenue in 2024through transparency and exchange of information (EOI) initiatives, lifting the cumulative total since 2009 above €4.2 billion. This follows a record €2.2 billion identified in 2023 alone—more than the entire 2009–2022 period—demonstrating how quickly returns can scale once systems and skills mature.
Globally, EOI standards have helped countries identify at least €130 billion in additional revenues since 2009, including €45 billion in developing countries—evidence that transparency is not a rich-world luxury but a core instrument for emerging economies.
The policy frontier: from global rules to African priorities
Two negotiation tracks will shape Africa’s tax landscape over the next three years. First, UN member states have begun work on a Framework Convention on International Tax Cooperation, a multi-year process aimed at a more inclusive system that better reflects developing-country interests. Second, the OECD/G20 reforms are moving from blueprint to practice. The global minimum tax (Pillar Two) now has detailed guidance, and the Subject-to-Tax Rule (STTR)—which lets source countries “tax back” certain intragroup payments below 9%—is especially salient for capital-importing African economies seeking to protect their tax bases.
Turning “$700 billion” from potential into progress
Close the IFF spigot with data and alliances. UNCTAD’s findings point to trade misinvoicing, profit shifting, and criminal flows. Scalable fixes include beneficial-ownership registries, risk-based audits, and automatic exchange of financial account data (AEOI). Countries that actively send EOI requests and systematically use AEOI data are pulling in the largest gains.
Leverage new rules—don’t get left out. As Pillar Two rolls out, updating treaties to include the STTR can shift taxing rights back to African jurisdictions. Regional bodies and forums—such as ATAF and sub-regional groupings—are already coordinating on compliance toolkits and cross-border recovery of tax claims.
Back transparency with capacity and trust. Revenue wins depend on clean data, secure systems, and skilled investigators. Recent African transparency reports document stepped-up training and information-security upgrades, but also stress that public trust—clear reporting on recovered sums and their use—determines whether compliance sticks.
Why it matters now
With debt costs up and concessional finance down, tax is Africa’s shock absorber. Evidence from the past two years suggests that transparent information flows and coordinated international rules can deliver real money, fast. Add in the UN process to rebalance global norms and the OECD’s operational guidance, and the ingredients are finally on the table. The task ahead, as Dr. Olomo argued, is political as much as technical: speak with one voice, set Africa’s own priorities, and industrialise for domestic markets—then use the proceeds to invest in people, power, ports, and productivity.
Originally published in French by L’Économiste Maghrébin, “Lutte contre l’évasion fiscale : un potentiel de 700 milliards pour l’Afrique,” Aug. 28, 2025;
