Technology Emerges as the New Backbone of Fiscal Transformation: Lessons from Africa
By Amged B. Shwehdy | 11 December 2025
Governments worldwide face mounting challenges in mobilizing and protecting financial resources vital for sustainable development. With shrinking fiscal space, rising debt servicing costs, intensifying climate shocks, and declining international aid, public budgets are under unprecedented strain. Yet, amid these pressures, a quiet revolution is underway: countries are increasingly turning to digital technologies as foundational tools for tax reform and public financial management (PFM). This digital transformation not only strengthens revenue collection but also enhances transparency, efficiency, and trust between governments and citizens.
Nowhere is this shift more pronounced than in Africa. Across the continent, governments are embracing technology to overcome structural bottlenecks in tax administration, procurement processes, and expenditure oversight. As global discourse intensifies on strategies to finance the Sustainable Development Goals (SDGs), Africa offers powerful lessons on leveraging digital innovation to build resilient and effective fiscal systems.
Technology as the Cornerstone of Modern Fiscal Sovereignty
Effective domestic resource mobilization (DRM) remains the linchpin of fiscal sovereignty. The International Monetary Fund (IMF) underscores that improving tax administration and digitizing revenue systems can increase tax-to-GDP ratios by 2 to 4 percentage points in developing countries. This advancement is crucial in many African regions where tax-to-GDP ratios are notably low. For example, countries in North Africa—including Algeria, Egypt, Libya, Mauritania, and Sudan—collect less than 15% of GDP in taxes, compared to the OECD benchmark range of 25–30%.
Digital transformation addresses this disparity by expanding the tax base, enhancing compliance, minimizing revenue leakages, and reinforcing transparency. However, the true promise of technology extends beyond increased revenue collection. It equally ensures that resources are harnessed ethically, efficiently, and transparently, maximizing their development impact.
Harnessing Technology for Revenue and Spending Efficiency
Modernizing Tax Systems Across Africa
Several North African countries have introduced groundbreaking digital tax reforms:
- Algeria launched the Jibayatic digital tax platform alongside electronic fiscal stamps to improve taxpayer authentication.
- Egypt deployed nationwide e-invoicing and e-receipt systems supported by artificial intelligence for real-time data validation, positioning the country to increase its tax revenue by 3% of GDP by 2027 under its Medium-Term Revenue Strategy.
- Libya, with support from the United Nations Economic Commission for Africa (UNECA), is developing its first integrated digital tax roadmap.
- Morocco has digitized over 547 administrative services, incorporating mobile-based tax filing and electronic invoicing tailored for small and medium enterprises (SMEs).
- Mauritania is expanding e-filing and digital payment systems throughout the country.
- Tunisia has broadened digital tax declaration tools and mobile tax payments, integrating digital procurement reforms to strengthen expenditure governance.
These initiatives demonstrate how technology helps broaden tax bases, reduce informal economic activities, and reinforce compliance.
Enhancing Transparency and Efficiency in Public Spending
Beyond revenue collection, digital tools are transforming expenditure management, auditing, and the safeguarding of public funds:
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Morocco’s e-Procurement System: Morocco’s digital procurement infrastructure, including the Ajal Observatory of Payments, provides real-time monitoring of procurement processes and payment delays within state-owned enterprises. It curtails corruption, ensures timely payments, boosts supplier confidence, and expands SME access to government contracts. The digitization of tender publication, bidding, evaluations, and contract management has improved accountability while reducing administrative hurdles.
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Egypt’s National Public e-Procurement System: Egypt is rolling out a system that digitizes all procurement phases, boosting transparency and leveling the playing field for suppliers nationwide. By centralizing tender publication and automating evaluations and contract awards, Egypt reduces discretionary decision-making and leakages, enhancing the efficiency of public expenditure. Early assessments note improved oversight and cost savings, complementing the country’s tax digitization ambitions.
Together, these programs illustrate a broader continental shift: digital tools empower African governments not only to increase revenues but also to protect and utilize those revenues effectively, closing governance gaps that have long hindered fiscal effectiveness.
A New Fiscal Vision Emerges from North Africa
At the UNECA Intergovernmental Committee of Senior Officials and Experts (ICSOE) meeting held in November 2025 in Rabat, North African countries coalesced around a shared fiscal vision influenced by the rising role of technology in governance. The discussions revealed several key insights:
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Digital-First Approach to Fiscal Systems: Digital transformation is no longer a peripheral reform but the core architecture of fiscal resilience. Countries emphasized accelerating e-tax systems, broadening digital payments, enhancing financial inclusion, and integrating technologies to strengthen compliance and reduce informality. This reflects a recognition that future domestic resource mobilization depends on digital infrastructure rather than traditional administrative expansions.
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Technology Sovereignty Over Dependency: Nations highlighted the importance of cultivating national innovation ecosystems—from digital infrastructure to local research and homegrown digital solutions—over relying solely on imported platforms. This strategy enhances system customization, reduces long-term costs, improves security, adaptability, and fosters citizen trust. Technology is thus reframed as a strategic asset, not just a development tool.
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Embedding Digital Trust in Fiscal Governance: Countries identified trust as foundational to digital fiscal systems. Tax digitalization initiatives must incorporate robust data protection, ethical artificial intelligence practices, cybersecurity, and transparent public spending. This reflects a broader paradigm whereby data protection, fiscal transparency, and digital accountability become integral to fiscal governance.
Collectively, these insights suggest an integrated framework where technology advances not only resource mobilization but also fairness, transparency, and citizen-centric public finance. This approach parallels a global trend—from Latin America to Southeast Asia—where digital infrastructure and trust mechanisms are regarded as fundamental fiscal building blocks rather than mere technical enhancements.
Concluding Thoughts: Financing the Future with Digital Transformation
Africa’s journey illustrates that digital transformation in fiscal governance transcends administrative reform—it is a strategic investment in national resilience and development. By coupling enhanced revenue collection with transparent, technology-enabled expenditure management, countries can unlock critical resources to finance climate adaptation, infrastructure, healthcare, and human development.
This digital fiscal revolution is not unique to Africa. Around the world, governments are seeking innovative ways to rebuild fiscal space and safeguard public resources in an increasingly complex financial landscape. Africa’s experiences provide a compelling blueprint, showcasing how technology-driven fiscal reforms can underpin sustainable development globally.
For more information, visit the United Nations Economic Commission for Africa website.
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