IDEAS home Printed from https://ideas.repec.org/a/bjc/journl/v11y2024i12p341-346.html
   My bibliography  Save this article

The Impact of Tax Hikes on Debt Burden and Economic Development in Africa: Analysing the Trade-Offs and Implications for Sustainable Growth

Author

Listed:
  • Wellington G. Bonga

    (Independent Researcher, Zimbabwe)

Abstract

This explanatory paper explored the complex relationship between tax hikes, public debt burden, and economic development in Africa. It argued that while increasing taxes can generate vital revenue for governments, it can also exacerbate debt levels and hinder economic growth if not managed effectively. Through a comprehensive analysis of the trade-offs involved, including case studies from various African countries, this paper aims to inform policymakers about the delicate balance needed for sustainable economic development. Through the findings, the study suggest that optimal tax policies, combined with effective governance, are crucial for enhancing economic resilience and addressing the challenges of public debt. More specifically the study recommends the strengthening of governance structures, engagement of stakeholders in policy making, assessing economic context before implementing tax hikes, diversifying revenue sources rather than solely relying on tax increases, and continuous monitoring and evaluation of tax policies to ensure sustainable economic growth.

Suggested Citation

  • Wellington G. Bonga, 2024. "The Impact of Tax Hikes on Debt Burden and Economic Development in Africa: Analysing the Trade-Offs and Implications for Sustainable Growth," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(12), pages 341-346, December.
    • Handle: RePEc:bjc:journl:v:11:y:2024:i:12:p:341-346
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijrsi/digital-library/volume-11-issue-12/341-346.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijrsi/articles/the-impact-of-tax-hikes-on-debt-burden-and-economic-development-in-africa-analysing-the-trade-offs-and-implications-for-sustainable-growth/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kassouri, Yacouba & Altıntaş, Halil, 2021. "Cyclical drivers of fiscal policy in sub-Saharan Africa: New insights from the time-varying heterogeneity approach," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 51-67.
    2. Joseph Mawejje & Nicholas M. Odhiambo, 2022. "The determinants and cyclicality of fiscal policy: Empirical evidence from East Africa," International Economics, CEPII research center, issue 169, pages 50-70.
    3. Njuguna Ndung’u & Abebe Shimeles & Damiano K Manda, 2021. "Growing with Debt in African Economies: Options, Challenges and Pitfalls [State and dynamics of debt in Africa]," Journal of African Economies, Centre for the Study of African Economies, vol. 30(Supplemen), pages 3-3.
    4. Bonga, Wellington G. & Mahuni, Kenneth, 2018. "Assessing the Impact of Ease of Doing Business and Corruption on Economic Growth for Africa Free Trade Zone (AFTZ) Member States," MPRA Paper 88932, University Library of Munich, Germany.
    5. Abdulfatai Adekunle Adedeji & Mutiu Abimbola Oyinlola & Oluwatosin Adeniyi, 2024. "Public debt, tax and economic growth in Sub-Saharan African countries," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 26(3), pages 992-1058, December.
    6. Bornhorst, Fabian & Gupta, Sanjeev & Thornton, John, 2009. "Natural resource endowments and the domestic revenue effort," European Journal of Political Economy, Elsevier, vol. 25(4), pages 439-446, December.
    7. Shantayanan Devarajan & Indermit S Gill & Kenan Karakülah, 2021. "Debt, Growth and Stability in Africa: Speculative Calculations and Policy Responses† [On International Integration of Emerging Sovereign Bond Markets]," Journal of African Economies, Centre for the Study of African Economies, vol. 30(Supplemen), pages 74-102.
    8. Charles O Manasseh & Felicia C Abada & Ebelechukwu L Okiche & Ogochukwu Okanya & Ifeoma C Nwakoby & Peter Offu & Anuli R Ogbuagu & Chiedozie O Okafor & Paul C Obidike & Nnenna G Nwonye, 2022. "External debt and economic growth in Sub-Saharan Africa: Does governance matter?," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-28, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thiombiano, Noel & Ouedraogo, Salifou & Moussa, Abiboulaye, 2022. "Fiscal policy rules and economic fluctuations in the countries of the West African Economic and Monetary Union (WAEMU)," Research in Economics, Elsevier, vol. 76(3), pages 252-263.
    2. Abdramane Camara, 2023. "The Effect of Foreign Direct Investment on Tax Revenue," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 168-190, March.
    3. A. Tidu, 2023. "Dissecting inequality: conceptual problems, trends and drivers," Working Paper CRENoS 202313, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Sarra Ben Slimane, 2024. "The Impact of Resource Revenue on Non-Resource Tax Revenue in Oil-Exporting Countries: Evidence from Nonlinear Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 272-280, January.
    5. MAIMOUNA DIAKITE & Jean-François BRUN, 2016. "Tax Potential and Tax Effort: An Empirical Estimation for Non-Resource Tax Revenue and VAT’s Revenue," EcoMod2016 9537, EcoMod.
    6. Abdramane Camara, 2019. "The effect of foreign direct investment on tax revenue in developing countries," Working Papers hal-03188025, HAL.
    7. Ma, Yong & Lv, Lin, 2023. "Financial development, financial instability, and fiscal policy volatility: International evidence," The North American Journal of Economics and Finance, Elsevier, vol. 64(C).
    8. Rosemary S. Taylor, 2025. "The fiscal effects of natural resource dependency in sub‐Saharan Africa," Natural Resources Forum, Blackwell Publishing, vol. 49(1), pages 384-406, February.
    9. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    10. Elbahnasawy, Nasr G. & Ellis, Michael A., 2022. "Inflation and the Structure of Economic and Political Systems," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 59-74.
    11. Ijaz Uddin & Muhammad Azam Khan, 2024. "Global Evidence on the Impact of Globalization, Governance, and Financial Development on Economic Growth," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14546-14577, September.
    12. Ohad Raveh & Yacov Tsur, 2018. "Resource Windfalls and Public Debt: The Role of Political Myopia," OxCarre Working Papers 205, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    13. Opoku Adabor & Emmanuel Buabeng & Raoul Fani Djomo Choumbou, 2021. "Asymmetrical effect of oil and gas resource rent on economic growth: Empirical evidence from Ghana," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1971355-197, January.
    14. Sena Kimm Gnangnon, 2023. "Effect of the Shadow Economy on Tax Reform in Developing Countries," Economies, MDPI, vol. 11(3), pages 1-49, March.
    15. Lau, Evan & Moll de Alba, Jaime & Liew, Kim-Hing, 2022. "Debt and economic growth in Asian developing countries," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 599-612.
    16. Juan Mauricio Ramírez & Juan Guillermo Bedoya, 2014. "Regalías directas por hidrocarburos y esfuerzo fiscal municipal en Colombia," Coyuntura Económica, Fedesarrollo, December.
    17. Vandycke, Nancy, 2013. "Natural resources, physical capital and institutions : evidence from Eurasia," Policy Research Working Paper Series 6586, The World Bank.
    18. Dora Benedek & Ernesto Crivelli & Sanjeev Gupta & Priscilla Muthoora, 2014. "Foreign Aid and Revenue: Still a Crowding-Out Effect?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(1), pages 67-96, March.
    19. Woldu, Gabriel Temesgen & Szakálné Kanó, Izabella, 2023. "Macroeconomic effects of fiscal consolidation on economic activity in SSA countries," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    20. Devarajan,Shantayanan & Do,Quy-Toan, 2021. "Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse," Policy Research Working Paper Series 9880, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjc:journl:v:11:y:2024:i:12:p:341-346. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Renu Malsaria (email available below). General contact details of provider: https://rsisinternational.org/journals/ijrsi/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.