Across African countries, clear public taxation systems are key to domestic resource mobilization – offering a path for countries to finance their own development. Currently, countries in Sub-Saharan Africa (SSA) remain the most highly dependent on foreign aid: in 2024, aid accounted for 3% of GDP on average across the region. According to the IMF, in SSA’s “low-income countries and fragile states,” this percentage typically stood at around 6% of GDP, and could reach up to 30%. In the wake of the dissolution of USAID in 2025 – the world’s largest development agency – Official Development Assistance (ODA) fell by 23.1 per cent globally. Due in part to these cuts, between 2025 and 2029, SSA is projected to have a financing gap of at least $245 billion.

As a result, domestic resource mobilization has become more urgent than ever, with taxation key to this effort. According to Brookings, “improving governance in revenue collection, including combatting corruption and strengthening transparency,” could raise tax revenues by almost 5 percentage points – around 20% of GDP in total – mobilizing approximately $94 billion dollars over the next 5 years in SSA. The African Tax Administration Forum (ATAF) has been at the forefront of these efforts since 2009, assisting governments to mobilize domestic resources through taxation in order to build democratic states that foster economic growth and social development for citizens. ATAF recognizes that strengthening tax systems in its 45 member countries is imperative, alongside the potential for Artificial Intelligence (AI) tools to significantly improve tax administration efficiency and effectiveness.

With the support of the Hewlett Foundation, ATAF and Development Gateway have launched a 12-month project aimed at strengthening the readiness of African tax administrations to adopt AI responsibly, strategically, and sustainably. This project responds to the growing potential for AI to improve operational efficiency, stronger compliance, improved taxpayer services, and more evidence-based decision-making. However, realising these benefits requires more than technology alone. Tax administrations need strong institutional foundations, including effective governance, quality data, appropriate digital infrastructure, skilled personnel, and clear strategies for implementation. By combining ATAF’s expertise in tax administration, technical assistance, and regional engagement with DG’s expertise in AI readiness, digital governance, and institutional diagnostics, the project aims to create practical and scalable pathways for responsible AI adoption, with three specific objectives: 

• Conduct an assessment to  generate the first continental evidence base and benchmarking on AI readiness across 45 ATAF member states to inform future investments, capacity development, and regional collaboration. 

• Partner with three selected African tax administrations to systematically assess their readiness and capabilities for responsible and sustainable AI adoption and support the development of practical AI strategies and implementation roadmaps aligned with their operational priorities.

• Strengthen peer learning and establish a foundation for long-term responsible AI adoption across African tax administrations.

The overarching goal is to strengthen the institutional foundations, governance, and capabilities needed for African tax administrations to adopt AI sustainably, while generating evidence to guide future technical assistance and investment across the continent. To achieve this, ATAF and DG will:

1. Establish a Continental Evidence Base on AI Readiness. ATAF and DG will conduct an AI readiness survey across member tax administrations to gather baseline data. These findings will create a Continental AI Readiness Benchmark to highlight priorities and guide future investments.
2. Translate Evidence into Practical Institutional Strategies in Three Tax Administrations. Building on a continental survey, three selected ATAF member tax administrations will receive deep institutional AI readiness assessments across key operational, governance, and technical dimensions. These evaluations will inform tailored AI strategies, implementation roadmaps, investment priorities, and capacity development plans aligned with each administration’s institutional maturity and resources.
3. Build Regional Learning and Practical Guidance. Evidence and insights from benchmarking and country engagements will be converted into practical tools, guidance, and peer-learning opportunities. Regional exchanges will allow tax administrations to share experiences and identify replicable strategies for responsible AI adoption.
4. Strengthen Institutional Ownership and Pathways to Implementation. Throughout the project, ATAF and DG will work with Revenue Authorities to align AI strategies with institutional priorities and leadership vision. They will also identify key investments and capacity needs to support seamless implementation.

By the project’s close, African tax administrations will have access to a structured evidence base on AI readiness; be supported in translating these findings into practical strategies, frameworks, and development plans; and have combined experience and lessons with continental evidence, peer learning, and technical guidance. These tax administrations will be better positioned to make informed decisions about where and how to adopt AI responsibly with stronger institutional foundations, clearer implementation pathways, and a better understanding of the investments and capabilities required. Ultimately, this will contribute to more efficient, effective, and citizen centred tax administration and provide ATAF, governments, and development partners with a stronger evidence base for identifying future investment priorities for digital transformation. With gaps in foreign aid widening, it is now imperative for African governments to mobilize domestic resources. Through this project, governments will be equipped with AI tools that can help them to leverage tax systems for domestic development financing.

References

https://democracyinafrica.org/africa-relies-too-heavily-on-foreign-aid-for-health-4-ways-to-fix-this/

https://mo.ibrahim.foundation/news/2025/demystifying-africas-dependence-foreign-aid

https://www.uneca.org/stories/can-africa-finance-its-own-development%3F

https://www.imf.org/en/news/articles/2026/06/22/aid-is-falling-fast-what-can-african-countries-do

https://www.brookings.edu/articles/mobilizing-africas-resources-for-development/ 

https://www.bridgespan.org/press-releases/ninety-percent-of-african-ngos-rely-on-international-funding-for-their-growth-bridgespan-study-find