Ghana pushes for simple debt rework in proposal to bondholders -sources
African countries have agreed to boost tax-to-GDP ratio to a minimum threshold of 15 percent of their economies, as part of an effort to realize the Continental Free Trade Area agreement. In a ministerial statement issued on Tuesday in Addis Ababa at the conclusion their meeting, African Ministers of Finance, Planning and Economic development also agreed to pursue new sources of revenue, including levies of financial transactions, royalties, income taxes, land taxes and leases by moving informal business into the formal sector.
The ministers acknowledged the importance of increasing the efficiency of tax administrations in their countries by modernizing tax systems, further improving economic and corporate governance in extractive sector and mobilizing additional revenue from natural resources rent.
The gross domestic product (GDP) of Africa grew at the rate of 3.1 percent in 2017 from 1.6 percent in 2016, registering the second fastest growth of any region in the world, after east and South Asia.
The minsters noted that this economic performance was due to mainly continued improvement in macroeconomic management, increased public and private investment, and growth in private consumption, as well as a rebound in trade.
Africa is expected to continue its recovery, growing at 3.6 percent in 2018 and 3.8 percent in 2019, according to the IMF.
The potential risks to growth in Africa could, however, include a slow recovery in advanced and emerging economies, the tightening of financial markets in developed economies, weather-related shocks and security concerns in some countries.
The minsters recognized that Africa has made significant progress in achieving desired social outcomes, with poverty rates declining in various sub-regions, albeit at a slow pace.
The ministers also recognized that African countries have made progress on various dimensions of regional integration, including trade, regional payment systems, the free movement of persons and right of establishment.
The participants further expressed their commitment to regional integration as a major driving force behind inclusive economic development in Africa, and welcomed the new milestone reached in the integration process through the signing of the agreement establishing the African Continental Free Trade Area in Kigali on March 21st, 2018 by 44 member states of the African Union.
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