Washington, D.C. — Fourteen Sub-Saharan African countries have agreed to strengthen domestic revenue systems and enhance private sector investment strategies amid tightening global finance conditions and declining access to concessional loans.
The commitment was reached during the 52nd Policy Dialogue of the IMF Africa Group I Constituency, held on the sidelines of the IMF and World Bank Annual Meetings in Washington, D.C. The countries pledged to adopt policies that boost domestic resource mobilization, attract long-term investment, and improve fiscal resilience.
The IMF Africa Group I Constituency represents Angola, Tanzania, Botswana, Comoros, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Zambia, and Zimbabwe — a coalition of nations advocating for fairer access to global financing and sustainable economic growth models.
Responding to Shifting Global Finance Conditions
The dialogue comes at a time when African countries are grappling with rising debt-service costs, currency depreciation, and declining development aid.
Access to concessional funding from traditional partners has tightened significantly since the pandemic, forcing governments to rely more heavily on domestic tax systems and private sector capital.
Dr. Natu El-Maamry Mwamba, Tanzania’s Permanent Secretary of Finance and Head of Delegation at the meetings, emphasized that collective financial reform is vital to maintain growth momentum.
“We must increase our fiscal space by improving tax efficiency and building investment-friendly environments. This agreement will help us attract sustainable financing and promote inclusive economic growth,” she stated.
Her comments align with the policy themes analyzed in Understanding the Real Economy: The Foundation for True Prosperity, which stresses that Africa’s next phase of growth must come from within — through productive sectors, revenue reform, and capital reinvestment.
The Africa Group I Strategy: Building Financial Independence
The new framework agreed upon by the 14 nations focuses on three strategic pillars:
- Revenue Modernization and Tax Efficiency
Countries will strengthen revenue authorities, improve digital tax collection, and close loopholes that lead to tax evasion and profit shifting.
Investments in digital tax systems — similar to initiatives in Kenya and Rwanda — are expected to enhance compliance and transparency. - Private Sector–Led Growth
Governments plan to promote investment inflows through reforms that reduce business barriers, improve regulatory certainty, and expand public-private partnerships (PPPs).
This approach mirrors trends covered in Turkey–Africa Investment to Hit US$40 Billion by 2025, where emerging economies are leveraging structured finance and de-risking models to attract sustainable capital. - Regional Cooperation for Fiscal Stability
The countries agreed to exchange best practices on debt management and collaborate with multilateral lenders to access blended finance and climate resilience funds — both crucial for infrastructure and green energy investments.
IMF Support and Fiscal Reform Outlook
According to a report presented by the IMF Executive Director representing Africa Group I, the global environment for development finance is changing rapidly.
Rising interest rates and constrained budgets in donor countries mean that African governments must prioritize domestic resource mobilization and private capital partnerships to sustain growth.
The IMF reaffirmed its support through technical assistance, policy advisory, and capacity-building programs to improve tax administration, public investment management, and anti-corruption measures.
These initiatives are expected to strengthen fiscal sustainability while positioning African economies to benefit more from the African Continental Free Trade Area (AfCFTA) — a major opportunity discussed in Africa’s Infrastructure Gap 2025.
The Broader Context: Africa’s Revenue and Investment Landscape
Africa’s average tax-to-GDP ratio remains below 17%, compared to a global average of 33%, limiting the fiscal space needed for infrastructure, healthcare, and education.
Boosting revenue efficiency — not just tax rates — could generate an additional US$100 billion annually, according to estimates by the African Tax Administration Forum (ATAF).
At the same time, private investment inflows have been slow to recover post-COVID, hindered by inflationary pressures and global uncertainty.
The joint approach by these 14 nations sends a strong signal that Africa is moving toward collective financial resilience — combining tax modernization, policy reform, and investment de-risking.
This model parallels strategies seen in Reducing Risk, Building Confidence: The Key to Unlocking Africa’s Infrastructure Boom, where guarantees and blended finance are reshaping Africa’s investment outlook.
Conclusion: Toward Fiscal Sovereignty and Sustainable Growth
By uniting under a shared agenda to boost revenue collection and attract private capital, Africa Group I countries are taking a decisive step toward financial independence and sustainable development.
The dialogue reflects a new generation of African leadership — pragmatic, data-driven, and focused on mobilizing domestic and diaspora resources to fuel long-term growth.
As Dr. Mwamba concluded,
“Our economies are ready to grow faster — but to do so sustainably, we must invest in systems that make every dollar count.”
This marks a pivotal moment in Africa’s economic story — one where revenue reform and private sector confidence become the engines of transformation.
