By Amged B. Shwehdy
Around the world, governments are grappling with the same question: how can we mobilise and protect the resources needed to fund development in an era of shrinking fiscal space? Public budgets are under unprecedented pressure as climate shocks intensify, debt servicing costs rise, and global aid flows decline. Yet amid these challenges, a quiet transformation is taking place. Countries are increasingly turning to digital technologies as the new backbone of tax reform and public financial management (PFM), strengthening their ability not only to collect domestic revenue but also to safeguard it, allocate it transparently, and build trust with citizens.
Nowhere is this shift more visible than in Africa, where governments are investing in technology to address long-standing structural bottlenecks in tax administration, public procurement, and expenditure oversight. As global debates intensify about how countries can finance the Sustainable Development Goals, Africa offers powerful lessons on how digital innovation can enhance state capacity and create more resilient fiscal systems.
Technology as the Foundation of Modern Fiscal States
Domestic resource mobilisation (DRM) is increasingly recognised as the cornerstone of fiscal sovereignty. According to the IMF, improving tax administration and digitalising revenue systems can raise tax-to-GDP ratios by 2 to 4 percentage points in developing countries. This is critical in regions where tax-to-GDP ratios remain low; in North Africa, several countries, including Algeria, Egypt, Libya, Mauritania, and Sudan, collect below 15% of GDP in taxes, compared to the OECD benchmark of 25–30%.
Digital transformation is helping governments break this cycle by widening the tax base, improving compliance, reducing leakages, and increasing transparency. But the real promise of technology lies not only in boosting how much governments collect; it lies equally in ensuring that resources are used efficiently, ethically, and transparently.
Technology for Both Revenue and Spending Efficiency
Technology for Strengthening Tax Reform
Across Africa, governments are using innovation to modernise their tax systems:
- Algeria introduced the Jibayatic digital tax platform and electronic fiscal stamps to enhance taxpayer authentication.
- Egypt has rolled out nationwide e-invoicing and e-receipt systems supported by artificial intelligence, enabling real-time data validation and improving compliance. The country’s Medium-Term Revenue Strategy aims to increase tax revenue by 3% of GDP by 2027.
- Libya has begun building its first integrated digital tax roadmap, with support from the UN Economic Commission for Africa (UNECA).
- Morocco has digitised more than 547 administrative services, including mobile-based tax filing and electronic invoicing for SMEs.
- Mauritania is expanding e-filing and digital payments nationwide.
- Tunisia has expanded digital tax declaration tools and mobile tax payments, while integrating digital procurement to strengthen expenditure governance.
These reforms demonstrate how technology can help countries broaden the tax base, reduce informality, and strengthen compliance, but they are only one part of the story.
Technology for Public Spending Efficiency
Digital technologies are also transforming how governments manage, audit, and safeguard public resources, ensuring that revenues collected do not leak through inefficient procurement systems or opaque spending channels.
Morocco: e-Procurement as a Transparency Engine
Morocco’s digital procurement ecosystem —including the Ajal Observatory of Payments— provides real-time monitoring of procurement processes and payment delays in State-owned enterprises. This system reduces opportunities for corruption, ensures timely settlements, improves supplier confidence, and expands access for SMEs to government contracts. By digitalising tender publication, bidding, evaluations, and contract management, Morocco has improved accountability and reduced administrative obstacles that once hindered competition.
Egypt: Public e-Procurement System
Egypt is implementing a national Public e-Procurement System designed to digitalise all stages of the procurement cycle. The system increases transparency, reduces discretionary decision-making, and allows suppliers across the country to compete on equal footing. By publishing tenders centrally and using technology to automate evaluations and contract awards, Egypt is reducing leakages and improving the efficiency of public expenditure — a critical complement to the country's tax digitalisation reforms. Early results indicate improvements in efficiency, cost savings, and enhanced oversight in large-scale public spending.
Together, these examples illustrate a broader shift: digital tools are enabling African governments not only to collect more revenue, but also to protect and utilise that revenue more effectively, closing long-standing governance gaps.
A New Fiscal Vision Emerging From North Africa
At the UNECA Intergovernmental Committee of Senior Officials and Experts (ICSOE) held in November 2025 in Rabat, North African countries converged around a shared fiscal vision shaped by the accelerating role of technology in governance. The discussions highlighted not only policy reforms but also a broader shift in how governments understand revenue, spending, and public trust in the digital age.
1. A Digital-First Approach to Fiscal Systems
Countries are recognising that digital transformation is no longer an auxiliary reform; it is the core architecture of future fiscal resilience. Governments agreed on the need to accelerate e-tax systems, expand digital payments, strengthen financial inclusion, and integrate technologies that enhance compliance and reduce informality. This shift signals a broader acknowledgement: effective domestic resource mobilisation will increasingly hinge on digital capabilities, not traditional administrative expansion.
2. Building Technology Sovereignty, Not Dependency
A second insight was the growing emphasis on technology sovereignty. Rather than relying exclusively on imported platforms, countries highlighted the importance of building national innovation ecosystems, from digital infrastructure to local research capabilities and homegrown digital solutions. This approach allows countries to tailor systems to their realities, reduce long-term costs, and ensure higher levels of security, adaptability, and trust. Technology, in this context, becomes a strategic asset, not only a development tool.
3. Embedding Digital Trust Into Fiscal Governance
Perhaps the most powerful idea was the consensus that digital fiscal systems can only succeed if built on strong citizen trust. Countries emphasised the need to align tax digitalisation with robust data protection, ethical AI use, cybersecurity, and transparency in public spending. This reflects a deeper shift: governments are beginning to treat data protection, fiscal transparency, and digital accountability as fiscal fundamentals rather than governance add-ons. Trust, transparency, and technology are becoming intertwined pillars of fiscal reform.
Together, these insights point toward a more integrated model of DRM and PFM; one that uses technology not only to mobilise resources but to create fairer, more transparent, and more citizen-centric public finance systems, mirroring a global shift, where countries—from Latin America to Southeast Asia—are increasingly treating digital infrastructure and trust frameworks as fiscal foundations rather than technical upgrades.
The Digital Fiscal State Framework, by Amged B Shwehdy
A Global Imperative: Financing the Future Through Technology
Africa’s experiences show that digital transformation in fiscal governance is not merely an administrative upgrade; it is a strategic investment in national resilience. By combining stronger revenue systems with transparent, technology-enabled public spending mechanisms, countries can unlock the resources needed to fund climate adaptation, infrastructure, health systems, and human development.
This is not an African challenge alone. Around the world, governments are looking for ways to rebuild fiscal space, strengthen trust, and finance long-term development. The lessons emerging from North Africa — rooted in innovation, transparency, and digital trust — offer a roadmap for countries navigating fiscal uncertainty.
Technology is becoming the new backbone of the modern fiscal state. When paired with strong governance and citizen trust, it has the power to transform the social contract and help countries finance a more resilient, sustainable, and equitable future.
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This article was first published by ECA on December 11th, 2025.
The author, Amged B. Shwehdy, is an ECA Fellow with the North Africa Subregional Office
Follow him on https://shwehdy.ly/ and https://www.linkedin.com/in/abshwehdy/