While economic theory suggests a wide range of potential drivers of public debt, there is little consensus regarding the most relevant ones. This paper analyzes the determinants of the public debt in Africa. This is done by adopting a Bayesian Model Averaging (BMA) approach applied to data of 51 African countries, spanning the period 1990-2018. Our results suggest that, among the set of twentyseven (27) regressors considered, those reflecting international financial and institutional conditions as well as internal economic prospects tend to receive high posterior inclusion probabilities. Then, the study explores the effect of these regressors on public debt by employing the fixed effects (FE) and the system Generalized Method of Moments (GMM) estimators. The results reveal that, foreign aid, fiscal deficit, trade openness, military expenditure, interest and exchange rates, debt-service, domestic credit, government stability index, political regime type and socioeconomic crises are the main and robust drivers of public debt accumulation in African countries. These findings are robust to changes in the model specification, the inclusion of socioeconomic crises and regional heterogeneities.
Tax administration reforms are often motivated by their potential to improve tax revenue mobilisation. However, their actual impacts are difficult to quantify. Using cross‐country panel data over the period 1990–2018, this paper analyses the impact of the 2012 tax administration reform on tax revenue performance in Togo. The estimation procedures that we follow are the synthetic control method (SCM) and the propensity score matching (PSM). After comparing the observed evolution of Togo's tax revenue output in the period 2013–2018 with that of synthetic Togo, our estimates show an accumulated gain in the tax‐to‐GDP ratio of a yearly average of about 2.8%. The results pass a battery of checks. Hence, the paper concludes that after almost 9 years of reform, the improvement in Togo's tax performance is remarkable. However, more tax‐related and institution‐related reforms are crucial to make Togo's tax system more buoyant and sustainably improved tax revenue mobilisation.
This study estimates the potential implications of the implementation of African Continental Free Trade Area (AfCFTA) Agreement for Ghana in terms of trade, welfare and revenue effects. By applying the WITS-SMART simulation model on 2018 disaggregated international trade data, the paper finds that total trade effects in Ghana are likely to surge by US$ 148.3 million while promoting consumers' welfare by US$ 8.597 million. However, revenue losses are imminent as the country might experience a drop in tariff revenue of US$ 8.604 million. Overall, the free trade area is expected to improve on the country's trade balance as exports are envisaged to outweigh imports. In order to mitigate the revenue losses, the paper recommends that the country keep substantial portion of tariff lines for sensitive and excluded products over a longer period during the liberalization.
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