MTN was hot. In January, the largest mobile telephony operator in Africa was presented by the Ghana authorities a very salty bill – some $ 700 million (658 million euros) – for tax and backward -looking irregularities. Vigorously contested by the South African company on the merits as in form, the sanction was finally withdrawn. But foreign investors remain in the viewfinder of a Ghanaian government in money: oil groups Tullow Oil and Kosmos Energy, or the gold company Gold Fields, were also asked to go to the cash register to settle penalties.
The case testifies to the pangs of the country of West Africa, strangled financially by a debt which reaches around 80 % of its gross domestic product (GDP). A burden as heavy as its tax revenues are skinny (less than 14 % of GDP), which makes the equation almost insoluble.
This weak tax is not a only Ghanaian problem. If there are large disparities between the countries of the continent, the average tax rate in Africa is only 16.6 %. Well below that of the development economies of Asia and the Pacific (21 %), not to mention the average of 33.4 % in rich countries, members of the Organization for Economic Cooperation and Development.
reform tracks
The need to improve tax collection has been a referred for years by development agencies. Because to hoist the standard of living of populations involves countless sites in terms of infrastructure, education, health. To carry them out, we need resources, which cannot depend only on the money of donors and foreign direct investments.
Calling the markets is a possible option, but it can turn against borrowers in the event of an outdoor shock: Ghana, who had massively issued euros, has seen their interest rates skyrocket with the health crisis and the Russian-Ukrainian conflict. There remain the income of oil, gas or minerals in countries rich in raw materials, very unstable since it is closely correlated in global courses.
Tax is therefore a means that are still largely underemployed in Africa. It is not a miracle recipe in countries, more than 90 % of which work in the informal economy. Uncrowded companies and workers without a contract further reduce the tax base. But reform tracks exist. Those relating to the effectiveness of tax administrations for example, by trying to better train the staff and by digitizing the collection. 2>
lack of confidence in the State
New taxes can be introduced, as the French Development Agency recalls in its latest book The African Economy in 2023 (La Découverte, 128 pages, 11 euros): South Africa and Malawi have thus Established a carbon tax in 2019, while Burkina Faso increased its tobacco tax rate. More controversial: some countries like Ghana have started to tax digital payments, at the risk of penalizing the poorest populations who massively use mobile money.
But in many African countries, tax consent suffers from the lack of confidence vis-à-vis the State. As Amaka Megwalu Anku, Africa Director within the Consulting Cabinet Eurasia Group points out, “Taxes are one of the most effective ways to point out that his legitimate government is found.
In Nigeria, the first African economy, tax revenues represent less than 6 % of GDP. “With oil money, the state has never really concerned taxes which would force it to a form of liable for citizens on the allocation of public expenditure,” said Mr.