Finance experts in Africa have underscored the need for African countries to establish Sovereign Wealth Funds as backup to national budgetary resources in national development efforts.
They believe these funds are important sources of funding to close gaps in budgetary allocations while strong tax compliance is needed to strengthen the tax base.
This is contained in a report issued here on Friday by the African Center for Economic Transformation (ACET) after hosting a two-day colloquium in Accra dubbed “Resource Mobilization and Management.”
The discussions, which centered around findings of an ACET study titled “Mobilizing and Managing Financial Flows for Development,” looked at the emergence of China, India and Brazil, together with philanthropic and private organizations as major players in global finance.
The discussants urged governments to consider beneficial ownership and country-by-country reporting to help curb illicit financial flows.
They also recommended that the focus of revenue mobilization should be on tax administration rather than tax collection.
“A taxpayers, database and simplicity in the tax system are essential in increasing tax revenue, while dispute resolution mechanisms must be strengthened to build the trust of taxpayers and improve mobilization.
“Participants called for expansion of the tax to gross domestic product (GDP) to increase revenue mobilization,” the panelists stressed.
Chief Economist at ACET, Yaw Ansu, said external resource inflows to Africa should support state-owned transformation agendas rather than donor defined initiatives.
“How do we make sure that resources support programs we need rather than what donors want?” he asked, stressing: “Economic growth and transformation require adequate resources and the right policies.”