- Sustainable Finance
- #RoadtoLuanda25
Financing the Future: How Africa and Europe Can Drive Global Reform to Boost Domestic Resource Mobilisation
- Adeyemi Dipeolu & Pascal Saint-Amans
As Africa and Europe prepare for the 7th AU-EU Summit in Angola later this month, both continents face a defining challenge: how to finance their future in an era of debt, fiscal pressure, and global uncertainty. The current international financing system is no longer fit for purpose. A new paradigm is needed, one that shifts from dependence and generosity to self-reliance, mutual accountability, and equitable economic cooperation.
Domestic resource mobilisation offers that pathway. It strengthens fiscal resilience, reduces external dependence, supports state building and political accountability, and builds predictability for long-term investment. For both Africa and Europe, stronger domestic systems are not only a matter of fiscal policy but an affirmation of shared sovereignty, the basis for stability, credibility, and long-term prosperity. Given the new geopolitical landscape, Africa and Europe need to reset their relationship, going beyond traditional rhetoric.
Building domestic strength through multilateral cooperation
Identified as a priority development mechanism back in 2002 at the Monterrey Consensus on Financing for Development, domestic resource mobilisation has been one of the longstanding pillars of Africa-Europe cooperation. At a time where ODA is reaching historic lows and drastic cuts to life-saving programming have put systems on edge, better leveraging internal resources must be part of the solution to fill current financing gaps.
To make this actionable, all countries should continue to bring focus to domestic tax policy and tax administration reforms to build modern, sound systems that provide tax certainty for investors, fairness for people and revenue for governments. Of course, they also need stronger multilateral mechanisms to manage and safeguard their resources in a globalised financial system. Progress over the past decade towards more transparency, stronger cooperation and the fight against companies’ tax avoidance should continue to be leveraged. While OECD progress on international tax reform has to an extent slowed down, discussions at the United Nations on a Framework Convention on International Tax Cooperation are gaining traction. Africa and Europe should revisit their relationship, move beyond traditional rhetoric and join forces to ensure that progress is being made between the two continents, setting an example for the rest of the world.
“Together, they should aim to table joint drafting proposals, and align EU and AU positions to avoid fragmentation and accelerate adoption.”
Joint AU–EU engagement can reconcile inclusiveness with administrative feasibility, ensuring the Convention takes into account work being done in the OECD and other forums while delivering greater revenue certainty for African treasuries and a level playing field for European businesses.
Combatting illicit flows to bolster fiscal sovereignty
Tax reform will only deliver results if paired with action against illicit financial flows (IFFs), which continue to drain African economies, impacting public spending. Since 1980, cumulative losses have surpassed $1.3 trillion, with nearly 80% linked to commercial practices such as trade misinvoicing, abusive transfer pricing and profit shifting. Moreover, when considering that the continent’s annual SDG financing gap is an estimated $194 billion, and latest data shows that yearly revenue mobilisation from taxes, sovereign wealth funds, pension funds and remittances bring in around round $920bn, but are quickly wiped clean due to debt repayments and IFFs reaching nearly $940bn, it’s clear the fight against capital flight is not just a technical matter, but a question of sovereignty and development.
Progress is, however, emerging through joint action. The Team Europe Initiative against IFFs has already mobilised €450 million across more than 70 programmes, supporting African tax authorities with data-sharing systems, beneficial ownership registries, and digital tools to detect mispricing in cross-border transactions. Several African countries - including Ghana, Namibia, South Africa and Zambia - are now piloting real-time IFF tracking, proving that transparency is achievable when political momentum and technical capacity align.
“The next step is scale”
The next step is scale: turning isolated progress into a continent-wide approach to asset tracing, tax cooperation, and financial accountability - backed by a global tax framework that finally reflects the priorities of all economies, not just the most powerful ones.
From commitments to capacity: financing the future together
What is needed now is a long-term agenda that turns political alignment into real revenue gains. That means investing in interconnected data systems that make financial flows visible, equipping tax administrations to enforce the rules, and scaling the cooperation models that are already delivering results.
Africa and Europe can drive this shift by expanding peer learning, strengthening tax and data infrastructure, and proving that recovered resources can fund development.
Financing the future will depend not on what is pledged at Summits, but on what is implemented - together.
- This op-ed was first published on Time Africa.
- Download the State of Africa-Europe 2025 Report for more.