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Liwaaddine Fliss

In the wake of the Sevilla Summit, I spoke with an African diplomat who was involved in the negotiations. He acknowledged the positive role African policymakers played in shaping the Compromiso de Sevilla, particularly the flagship pledge to double Official Development Assistance (ODA) for Domestic Resource Mobilisation (DRM) by 2030. He saw this as a step in the right direction. Yet, he urged for realism, pointing out that doubling ODA from the current very low base does not create a tidal wave of change—it might not even fill a ‘bathtub’.

His powerful conviction was clear: the real work, he insisted, was not in Sevilla, but starts now in our own capitals to build strong institutions that achieve the developmental aspirations of Africans.

That discussion crystallised the core issue. While global commitments on financing for development are welcome, the staggering $1.6 trillion financing gap that Africa faces in achieving the SDGs cannot be met solely by external aid. Although the Compromiso de Sevilla rightly calls for a reformed global financial architecture, I was always confident that the most powerful lever for change lies within Africa itself: the urgent need to build strong national institutions to mobilise domestic resources and finally control financial flows.  This is the core argument of the most recent flagship report from the United Nations Office of the Special Adviser on Africa: Strengthening the National and International Architectures for Financing for Development.

For too long, the narrative has been defined by a shortfall in external support. Official Development Assistance to developing countries averages just 0.32% of developed nations’ GNI, a fraction of the 0.7% target, creating an average annual $75 billion delivery gap to Africa. But even if this gap were to be closed, ODA would remain a modest part of the solution and as the diplomat underscored, even a doubled DRM pledge does not change the fundamental equation. The real transformation begins when African countries reclaim ownership of their development agendas by building the institutional capacity to fund their own futures.

The challenge is twofold: African countries are not collecting enough revenue and are losing a significant amount. Africa’s tax-to-GDP ratio, at 16%, lags significantly behind other regions. This is compounded by an annual haemorrhage of approximately $88.6 billion in Illicit Financial Flows (IFFs)—a figure that surpasses ODA and Foreign Direct Investment in many countries. This is not merely a financial loss; it means less money to build schools, equip hospitals, and construct necessary infrastructure, such as roads and power. One country study cited in the  UN report shows IFFs were three and a half times the ODA it received. These lays bare a simple truth- if development finance is not nationally owned, how can it be sustainable?

The solution is not a mystery. It requires a deliberate, holistic strategy built on three interconnected pillars: robust economic governance, digital transformation, and strategic financing frameworks.

First, African countries must strengthen their economic governance to control their resources. The colonial-era extractive economic model persists, limiting Africa’s leverage and opportunities for value addition. Effective natural resource governance is the missing piece for Africa to gain control over its economic and financial flows. When countries depend on unpredictable non-tax revenues from raw material exports, they remain vulnerable to commodity price shocks. Strong, transparent governance frameworks are fundamental to ensuring revenues from extractive industries are managed accountably and invested in diversifying our economies. This is where institutions like the African Peer Review Mechanism (APRM) prove invaluable, as they foster accountability by sharing best practices and conducting peer reviews across the continent.

Second, there is a need to accelerate the digitalisation of the state machinery, particularly tax administration. Here, the potential is immense. African countries have already made impressive strides, reducing the tax collection cost from 9.5% in 2018 to just 1.4% in 2022. But they are still lagging in investment in digital tools. For instance, the share of ICT expenditure in African tax administrations' overall expenditures is only 5%, compared to 12% in Latin America and 16% in Asia.

Initiatives like the African Digital Public Infrastructure Stack (A-DPI-Stack), promoted by the UN, offer a transformative opportunity. By integrating digital identity, payment platforms, and data exchange tools, we can create scalable solutions to modernise revenue collection, combat evasion, and expand the tax base. Imagine AI-driven analytics cross-referencing filings to detect evasion, or blockchain securing transactions and reducing fraud. These are not futuristic dreams but tangible tools that can plug leaks and bring informal economies into the formal fold, and already, a few African countries have begun using these tools to enhance efficiency of their tax administrations.

Third, African countries must rationalise their public financial management strategies. This means eliminating redundant and costly tax incentives, which cost African governments an estimated 1.8% of GDP in forgone revenues annually. It also means implementing Integrated National Financing Frameworks (INFFs) to align all funding sources—domestic, international, public, and private—with clear national development priorities. Currently, 36 African countries are embarking on this path, which is a promising sign of a strategic shift.

The payoff for implementing the holistic strategy is substantial. IMF analysis suggests that by improving tax effort and strengthening institutions, African nations could increase their tax revenues by up to 13.6 percentage points of GDP.

That conversation with the diplomat confirmed that the next, more critical step, is national. It is about building effective states that can deliver services, foster resilience, and command the trust of the population. According to him, the call to action is clear. African governments must prioritise investment in strengthening their national institutions to enhance their effectiveness and efficiency.

 By harnessing its own resources and controlling its financial flows, Africa can finance its own future, turning the page from dependency to ownership and achieving sustainable prosperity.

Liwaaddine Fliss is a Programme Management Officer with the Office of the Special Adviser on Africa (OSAA)