Leveraging Health Taxes to Support Development Programmes in Africa

Strategic Insights -

Africa faces a significant development financing gap, requiring an additional $194 billion annually to meet the 2030 United Nations Sustainable Development Goals (SDGs). Domestic health spending in Africa falls below the recommended 15% target, averaging 7.3% in 2020. The region's low Tax-to-GDP ratio, averaging 15%, is also a concern, trailing behind global benchmarks. To address these challenges, finance and public health experts are increasingly focusing on health taxes, which can generate revenue for governments while discouraging the consumption of harmful products.

Key Takeaways:

  • Africa faces a staggering $1.6 trillion development financing gap to meet the SDGs, requiring an additional $194 billion annually.
  • Domestic health spending in Africa generally falls below the recommended 15% target, averaging 7.3% in 2020.
  • The region's low Tax-to-GDP ratio, averaging 15%, is a concern, trailing behind global benchmarks.
  • Health taxes, such as excise duty on tobacco, alcohol, and sugar-sweetened beverages, can generate revenue for governments while discouraging the consumption of harmful products.
  • Implementing effective health taxes is a multi-faceted challenge requiring evidence-based policies, technical capacity, and sustained political will.
  • The African Tax Administration Forum (ATAF) is supporting African countries on health taxation frameworks through a programme launched in 2023, initially focusing on tobacco taxation.
  • The programme aims to support African countries in tackling one of the world's leading preventable causes of death - tobacco use - while boosting domestic resource mobilisation.
  • ATAF has launched a specialised programme on tobacco and excise tax administration for African officials, which has trained officials from over 30 countries.

Statistics:

  • $1.6 trillion: The development financing gap Africa faces to meet the SDGs.
  • $194 billion annually: The additional funding required to meet the SDGs.
  • 15%: The recommended domestic health spending target, which Africa generally falls below.
  • 7.3%: The average domestic health spending in Africa in 2020.
  • 15%: Africa's average Tax-to-GDP ratio, trailing behind global benchmarks.
  • 34%: The OECD average Tax-to-GDP ratio.
  • 8 million: The annual number of tobacco-related deaths.
  • $30 million: The amount collected in sugar content tax in Zimbabwe in 2024.
  • $25.4 million: The amount collected in sugar content tax in Zimbabwe in the first half of 2025.

Sources:

  • United Nations (2023): Report on the Sustainable Development Goals.
  • African Tax Administration Forum (Ataf): Update on Tax-to-GDP ratio in Africa.
  • World Health Organisation (WHO): Figures on tobacco-related deaths.
  • African Tax Administration Forum (Ataf): Programme on tobacco taxation.
  • Zimbabwean Government: Statutory Instrument 16 of 2024, the Customs and Excise (Tariff) (Amendment) Notice, 2024 (No 5).
  • Treasury, Zimbabwe: Collection of sugar content tax in 2025.