Abuja: The African Development Bank (AfDB) has identified critical strategies for Nigeria to enhance its domestic capital mobilisation. Prof. Kevin Urama, Chief Economist and Vice President for Economic Governance and Knowledge Management at the AfDB, shared these insights during an interview with the News Agency of Nigeria (NAN) in Abuja.
According to News Agency of Nigeria, Prof. Urama highlighted that strengthening public finance management and governance could significantly boost Nigeria’s capacity to mobilise domestic resources, which are pivotal for development financing. He stressed that stable macroeconomic policies and robust institutions are essential to attract long-term investments and promote voluntary tax compliance.
Prof. Urama explained that investing in economic governance and macroeconomic policy environments fosters a better social contract between citizens and the government, encouraging tax payments. He advocated for improved management of public resources, reduced leakages, and stronger debt sustainability frameworks to enhance confidence in government operations and expand the tax base.
He further noted that Africa could potentially raise an additional $469 billion annually through better domestic resource mobilisation without increasing tax rates. Additionally, adopting best practices in revenue administration could generate about $311.6 billion in non-tax revenues annually across the continent.
Prof. Urama advised that Nigeria and other African nations should focus on improving transparency, accountability, and public service delivery to build trust between governments and citizens. Enhanced tax compliance and efficient non-tax revenue collection, he explained, would provide governments with more resources to support development priorities and lessen reliance on external borrowing.
The economist likened the concept of capital mobilisation to water collection, suggesting that nations with sound economic management are more likely to attract and sustain investment. “Money is like water. If you have a good pond that is not leaking, whenever there is rain, you will collect water and it will remain for you for a longer time,” he remarked.