Amid concerns about the growing impact of taxation on the performance of the ICT sector in the economy, the Economic Commission for Africa (ECA) says countries must develop and adopt its own peculiar framework to monitor and assess the situation.
The recommendation was made at the 2025 Conference of African Ministers of Finance, Planning and Economic development in Addis Ababa.
The issue of how much, or how little to tax the ICT sector to optimise performance of the economy, improve digital access and create jobs were the spotlight at the conference.
In a presentation, Chief Emerging and Frontier Technologies, Innovation and Digital Transformation Section Technology, Innovation, Connectivity, and Infrastructure Division, ECA, Mactar Seck, was of the opinion that the picture was mixed.
Citing data from ECA research, Seck said Zambia not only increased taxes but also saw a concurrent increase in tax receipts and job creation as well as a 14.6% increase in broadband penetration.
Also, Kenya showed a similar trend on all the same areas, with a 9.7% increase in broadband penetration, while Ethiopia and Nigeria decreased taxes, with an increase in broadband penetration of 4.6% and 4.9% respectively and a large increase in jobs but lower tax receipts.
An increase in taxes in the first scenario, Seck said, was due to enhanced productivity throughout the economy and a widening of the tax base through improved efficiencies and growth.
Besides, research also showed that a 10% increase in broadband penetration could produce additional gross domestic product (GDP) growth of between 0.8% and 2.46%.
However, he said, despite some progress in the past 20 years, Africa remained the least connected continent. In the past five years, he said there had only been a 1% increase in connectivity in the sector.
Seck and other speakers said a big issue for digital access in Africa was affordability as well as the large digital divide between urban and rural areas.
“Africa’s broadband costs are high compared to other countries – at least five times that of other continents. We need to do something about this,” he said.
“All projections are positive for the continent if we do something because we expect the digital economy to be $712bn by 2030m, which will increase GDP by 8.2%,” he added.
“Each country must develop its own framework to monitor and assess the impact of tax on the ICT sector. The majority of countries decreasing taxes have seen an increase of tax receipts, job creation and broadband. But given the current situation of our economies, we need to do this gradually and see how it evolves,” he said.
The ECA, which was established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN’s five regional commissions, has the mandate to promote the economic and social development of its Member States, foster intraregional integration and promote international cooperation for Africa’s development.
ECA consists of 54 Member States and plays a dual role as a regional arm of the UN and a key component of the African institutional landscape.
