KALONDE NYATI, Lusaka
AS AFRICA continues to grapple with external headwinds and domestic challenges, the World Bank says embarking on structural reforms that will result in sufficient tax collection will go a long way in cushioning the challenges.
Acting World Bank chief economist Punam Pole says low taxes in developing countries continue to impede growth, hence the need to embark on structural reforms.
Ms Pole said there is need for the region to focus on domestic resource mobilisation reforms such as improved taxation to boost competiveness currently, undermined by external headwinds and domestic challenges.
â€œCountries need to speed up structural reforms on taxation. Most African countries have very low tax revenues much lower than other developing countries outside Africa and this has affected growth,â€ Ms Pole said on Monday during the launch of the â€˜Africaâ€™s Pulseâ€™, a twice-yearly report thatÂ analyses economic trends on the continent.
Ms Pole said sufficient and efficient tax collection is key in improving the continentâ€™s infrastructure, particularly transport and energy infrastructure and in enhancing productivity.
She said while high taxes can discourage investment and expansion by existing corporates and individual tax payers, Zambia and African countries should ensure that taxes are streamlined and are not complicated.
On the economic outlook, Ms Pole said Zambia and other countries in the region continue to face economic challenges with growth prospects being revised to about 3.7 percent from 4.6 percent recorded last year, owing to low commodity prices and power outages.
â€œSlow growth in China, [which is the major consumer of copper and other raw materials] infrastructure constraints and low electricity supply due to drought have limited growth prospects for Zambia and other countries,â€ she said.
However, the Africaâ€™s Pulse report, says despite most African countries facing challenges, countries such as Cote dâ€™Ivoire, Ethiopia, Mozambique, Rwanda and Tanzania have continued to post robust growth, with growthÂ expected to be aroundÂ seven percent or moreÂ this year to 2017, spurred by investments in energy and transport, consumer spending and investment in the natural resources sector.
KALONDE NYATI, Lusaka