On 25 June 2020 the OECD’s Global Forum on Transparency and Exchange of Information launched Tax Transparency in Africa 2020 which is a Progress Report of the Africa Initiative up to and including 2019.

The Africa Initiative was set up in October 2014 to use the potential of tax transparency and exchange of information to combat the high levels of illicit financial flows from African countries. The initiative was launched as a partnership between the OECD Global Forum, its African members and regional and international organisations and development partners including the World Bank group. Currently there are 32 African member countries.

An increase in tax transparency presents opportunities to curb illicit financial flows and tax evasion and thereby increase domestic resource mobilisation. The focus on Africa allowed specific regional approaches to be developed that would be adapted to the needs of African countries. This also helps progress to be made with the African Union Agenda 2063 and to achieve the Sustainable Development Goals.

The work program of the Africa Initiative involves developing and consolidating a culture of transparency and exchange of information on request in African countries; and building on that foundation to move on towards the implementation of automatic exchange of information.

The report shows that progress has been made on the two pillars of the Africa Initiative which involve increasing political awareness and commitment to the transparency goals building the capacity for tax transparency and exchange of information in African countries. The report notes that twelve African countries received technical support by participation in the Induction Programme in the period and in addition to this more than 20 countries received assistance that was tailored to their specific needs.

The establishment of the key elements of a functional infrastructure for exchange of information, such as the exchange of information unit, continues to improve in the continent. There are now 3,262 bilateral relationships on exchange of information in African countries compared to 2,523 in 2018, mainly as a result of more African countries joining the Convention on Mutual Administrative Assistance in Tax Matters. This enables more African countries to use the information from cross-border exchange in their tax investigations.

The increase in the number of exchange of information requests made by African countries has given rise to additional tax revenue. Between 2014 and 2019, a group of eight African countries identified additional tax collections amounting to USD 189 million as a result of information exchange.

Progress is also being made on the implementation of automatic exchange of information. Mauritius, Seychelles and South Africa started the automatic exchange of tax information in 2017/2018. In 2019 Ghana began information exchanges with 56 other countries; Nigeria is expected to start in 2020; and Morocco is preparing to start its first exchanges in 2021. The OECD’s Global Forum has provided technical assistance to five African countries (Cameroon, Kenya, Senegal, Tunisia and Uganda) to assist them in working out a practical timeline for implementation the standard on exchange of information. Countries have been encouraged in their preparations by the results of the voluntary disclosure programmes launched before the first automatic exchanges, which resulted in the recovery of EUR 102 billion globally, including USD 82 million in Nigeria and USD 296 million in South Africa.