The G-20 Tax Agenda and Africa’s Taxation Needs

This research paper by the South African Institute of International Affairs examines the G-20 and OECD Base Erosion and Profit Shifting (BEPS) project from an African perspective. It analyzes the causes of Africa's low tax base, the impact of illicit financial flows and tax incentives, and provides recommendations for African nations to better influence global tax standards to ensure sustainable domestic revenue mobilization.

• African countries generally have a low tax revenue base, averaging 13% of GDP, which is significantly lower than the 35% average in OECD countries. Generating tax revenues of at least 20% of GDP is identified as a necessary threshold for low-income developing countries to combat hunger and achieve the UN's Millennium Development Goals.
• The low tax base in Africa is driven by several structural and political factors, including a large informal sector, corruption, and a 'race to the bottom' where countries reduce corporate taxes and royalties to attract foreign investment, particularly in the mining sector.
• Tax incentives and exemptions cause substantial revenue losses for African governments. In Ghana, these resulted in a loss of 6.13% of GDP, while combined losses for Kenya, Uganda, Tanzania, and Rwanda are estimated at up to $2.8 billion annually.
• Illicit capital flight is a major constraint to African growth, with estimated annual losses between $1.26 trillion and $1.44 trillion. In sub-Saharan Africa specifically, $814 billion was lost between 1970 and 2010.
• The OECD/G-20 BEPS project aims to close international tax loopholes and ensure profits are taxed where economic activities occur. While the project is seen as a step in the right direction, there are concerns regarding the 'exclusive nature' of the project and the capacity constraints of developing countries to participate meaningfully.
• South Africa's membership in the G-20 offers a platform to influence international policies for Africa, but it faces the challenge of not having a formal mandate from other African countries and the need to balance regional concerns with its own national interests.

APA

Fundira, T. (2015). The G-20 Tax Agenda and Africa’s Taxation Needs. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf

Chicago

Fundira, Taku. The G-20 Tax Agenda and Africa’s Taxation Needs. South African Institute of International Affairs, 2015. https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf.

Wikipedia

{{cite report |last1=Fundira |first1=Taku |title=The G-20 Tax Agenda and Africa’s Taxation Needs |publisher=South African Institute of International Affairs |date=April 2015 |url=https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fundira2015g20, author = {Fundira, Taku}, title = {{The G-20 Tax Agenda and Africa’s Taxation Needs}}, institution = {South African Institute of International Affairs}, year = {2015}, month = apr, url = {https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }