EU support to help countries in sub-Saharan Africa generate more domestic revenue is not yet effective because of weaknesses in the way it is implemented, according to a new report from the European Court of Auditors (ECA). The auditors found room for improvement in the design of support operations, the conditions attached to payments and the policy dialogue with the countries concerned.
Generating government revenue from domestic tax or other sources (“domestic revenue mobilisation”) is crucial for sustainable development; as such, it has become a priority of EU development policy. The EU supports revenue mobilisation in a variety of ways, including budget support. Between 2012 and April 2016, this support totalled €4.9 billion, of which €1.7 billion went to sub-Saharan Africa.
The auditors examined the European Commission’s use of budget support contracts to support revenue mobilisation in nine low- and lower-middle-income countries in sub-Saharan Africa: Cape Verde, the Central African Republic, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal and Sierra Leone . They found that while the Commission’s approach led to better needs assessment requirements, weaknesses in implementation prevented the support contracts’ potential from being fully exploited and the Commission had not used them effectively.
“Domestic revenue mobilisation is a priority for the international development community,” said Danièle Lamarque, the Member of the European Court of Auditors responsible for the report. “But the EU’s support is being undermined by design and implementation weaknesses and challenging local circumstances.”