Australian Journal of Basic and Applied Sciences

March 2023


Public Revenue/Gross Domestic Product (GDP.) Nexus: A Panel Data Analysis of Selected African Countries.

Deebii Nwiado, Silva Opuala-Charles and Leelee Nwiibari Deekor

ABSTRACT: Nigeria is the largest economy economy, surpassing South Africa in sub-Sahara Africa, yet her public revenue to GDP ratio is the lowest. This applies to the other African countries why? Thus our aim is to investigate the low public revenue as a percentage of GPD in African countries. We apply the panel data econometrics using cross sectional tax revenue data from ten randomly selected African countries for the period (2000 – 2020) twenty years. Two hypotheses: Ho1: (a, Political instability, lack of the rule of law and Government effectiveness in African countries as measured by WGI’s (i) the quality of civil service (ii) the quality of policy formulation and implementation could negatively impact the size of tax revenue (tax) to-GDP ratio in Nigeria and the other African countries. (b. The inability of African governments to control corruption as measured by Transparency International Index and the Worldwide Government Indicator, is an explanation for the low tax revenue-to-GDP ratio in African countries. Our findings confirmed that the many inefficient governments in Africa, public instability and corruption negatively impact public revenue generation. Adequate rule of law and regulatory quality could help improve the generation of public revenue in African countries.

[ FULL TEXT PDF 1-13 ] DOI: 10.22587/ajbas.2023.17.3.1