Africa’s development financing gap has widened to more than $1.3 trillion annually despite the continent remaining one of the world’s fastest-growing regions over the past two decades, according to the African Development Bank (AfDB).
In its 2026 African Economic Outlook report, the AfDB said Africa recorded average real GDP growth of 3.8 percent annually over the last 20 years, but weak domestic resource mobilisation, fragmented financial systems and declining external financial flows continue to constrain development financing needed to achieve the Sustainable Development Goals (SDGs).
The bank said Africa’s revenue-to-GDP ratio declined sharply from between 23 percent and 30 percent in the 2000s to 16.2 percent in 2024, reflecting tax collection that has failed to keep pace with economic growth due to narrow tax bases, weak compliance, exemptions and limited taxpayer coverage.
The report also showed that domestic credit to the private sector averaged just 23.7 percent of GDP between 2020 and 2024, less than half the 51.9 percent recorded in Latin America and the Caribbean, underscoring the continent’s weak financial intermediation capacity.
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