Addis Ababa, 24 March 2025 (ECA) - The issue of how much, or how little to tax the ICT sector to optimise performance of the economy, improve digital access and create jobs came under the spotlight at the ECA’s 2025 Conference of African Ministers of Finance, Planning and Economic development.
In a presentation, Mactar Seck, Chief Emerging and Frontier Technologies, Innovation and Digital Transformation Section Technology, Innovation, Connectivity and Infrastructure Division, ECA, said the picture was mixed.
Seck, citing ECA research, said Zambia had increased taxes and also seen a concurrent increase in tax receipts and job creation as well as a 14.6% increase in broadband penetration. Kenya showed a similar trend on all the same areas, with a 9.7% increase in broadband penetration.
Ethiopia and Nigeria had decreased taxes and seen an increase in broadband penetration of 4.6% and 4.9% respectively and a large increase in jobs but lower tax receipts.
An increase in taxes in the first scenario, Seck said, was due to enhanced productivity throughout the economy and a widening of the tax base through improved efficiencies and growth.
Research showed that a 10% increase in broadband penetration could produce additional GDP growth of between 0.8% and 2.46%.
However, he said, despite some progress in the past 20 years, Africa remained the least connected continent. In the past five years, there had only been a 1% increase in connectivity.
Seck and other speakers said a big issue for digital access in Africa was affordability as well as the large digital divide between urban and rural areas.
“Africa’s broadband costs are high compared to other countries – at least five times that of other continents. We need to do something about this,” he said. “All projections are positive for the continent if we do something because we expect the digital economy to be $712bn by 2030m, which will increase GDP by 8.2%,” he added.
"Each country must develop its own framework to monitor and assess the impact of tax on the ICT sector. The majority of countries decreasing taxes have seen an increase of tax receipts, job creation and broadband. But given the current situation of our economies, we need to do this gradually and see how it evolves,” he said.
Issued by:
Communications Section
Economic Commission for Africa
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