Addis Ababa, 6 July 2026, ECA) – As traditional aid budgets shrink across the world's biggest donor countries, African countries are under growing pressure to mobilize more of their own resources to finance development.
OECD data show global Official Development Assistance (ODA) fell by a record 23.1 per cent in 2025, dropping from USD 215.1 billion in 2024 to USD 174.3 billion.
Bilateral aid to Africa also declined sharply. Germany, the United States, the United Kingdom, Japan and France accounted for 95.7 per cent of the global decline - the first time the world's five largest aid donors all reduced assistance in the same year.
What does this mean for Africa's 1.6 billion people, projected to reach 2.5 billion by 2050? How does the continent continue financing schools, hospitals, roads, electricity, clean water and jobs needed for a population growing at that pace?
Already, the impact is being felt in healthcare, education, humanitarian assistance and climate adaptation, where many African countries have long relied on external financing.
In some countries, for example, shrinking aid could make it harder to sustain essential healthcare services without increasing the financial burden on patients
For Stephen Karingi, Director of the Macroeconomics, Finance and Governance Division at the Economic Commission for Africa (ECA), the starting point is for African countries to look inward and mobilize more of their own resources to finance development
"First and foremost, it is the responsibility of each country to finance its own development."
Mr Karingi says African countries already have many of the tools needed to strengthen domestic resource mobilization. The challenge is using those tools more effectively.
While taxation is often considered the cornerstone of domestic resource mobilization (DRM), DRM encompasses much more than taxes. It includes revenues from natural resources, domestic capital markets, pension and savings funds, public-private partnerships, diaspora financing and efforts to curb illicit financial flows.
These domestic financing instruments provide countries with multiple pathways to finance development while reducing reliance on external resources.
Taxation remains the most durable source of public revenue because it is more predictable and less exposed to external shocks than borrowing, foreign aid or commodity windfalls. It also gives countries greater control over how they finance and shape their own development.
Yet expanding the tax base is not without challenges. About 80 per cent of Africa's workforce operates in the informal economy, making it more difficult for governments to identify taxpayers and collect revenue efficiently.
Technology is making the task easier. Artificial intelligence, big data and digital tools are strengthening tax administration while making public institutions more transparent and accountable.
Mr Karingi points to Egypt, where digitalization has improved revenue mobilization, and Rwanda, where transparent procurement systems have helped reduce leakages in public spending.
He also believes African countries could unlock billions of dollars in additional domestic resources by tackling illicit financial flows.
To that end, ECA is helping countries identify and quantify those flows while supporting African negotiators in discussions on the proposed UN Convention on International Tax Cooperation, particularly on issues relating to illicit financial flows and profit shifting by multinational companies.
The Commission also provides policy advice, data-driven research and technical assistance to help member States strengthen public financial management, improve tax administration and identify new sources of domestic financing.
Mr Karingi notes that financing Africa's development is a shared responsibility. Citizens have a duty to contribute through taxes, governments have a duty to use public resources responsibly, and both must be prepared to hold each other accountable.
For the latest edition of the Sustainable Africa Series citizens interviewed in Cameroon, the Central African Republic, Kenya, Nigeria, Rwanda, Uganda and Zimbabwe consistently said they were willing to pay taxes, provided governments are transparent about how public money is spent.
"It's our responsibility to pay taxes if we want development in our country. But if I keep paying taxes and nothing is being done with the money, at some point I'll feel like withdrawing from paying taxes," said Danny Zara, a cake vendor in Cameroon.
For Ouassere Divin of the Central African Republic, domestic resource mobilization is also about national ownership.
"Paying taxes ensures greater autonomy. That's how we are better able to decide our own priorities. Foreign partners should only provide support. After all, even what they give us has to be repaid in one way or another."
Whether Africa can finance more of its own development will depend not on a single solution, but on how effectively countries mobilize domestic resources, strengthen public institutions and earn the trust of citizens. The tools already exist. The challenge is putting them to work.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
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