The African Development Bank Group (AfDB) has approved a $5.5 million grant to support ongoing tax reform efforts in Nigeria and other West African countries, as governments across the region intensify moves to boost domestic revenue and strengthen fiscal stability.

The grant will fund the Strengthening Tax Administration Capacity Project in West Africa (STACP-WA), a regional initiative designed to modernise tax systems, enhance compliance, and improve revenue collection efficiency. The project will be implemented in collaboration with the West African Tax Administration Forum (WATAF). According to the AfDB, the initiative targets six countries—Burkina Faso, Guinea, Guinea-Bissau, The Gambia, Liberia, and Sierra Leone—while also promoting broader cooperation within the Economic Community of West African States (ECOWAS). Nigeria, as Africa’s largest economy, is expected to play a central role in shaping and benefiting from the reforms. Officials say the project aims to address longstanding challenges in tax administration, including revenue leakages, weak compliance, and limited institutional capacity. It will introduce digital tools such as electronic invoicing systems, data analytics for tax monitoring, and improved transfer pricing frameworks to strengthen oversight, particularly in key sectors like natural resources. AfDB Director General for Nigeria, Abdul Kamara, noted that improving domestic resource mobilisation is critical for sustainable development. He said stronger tax systems would enable governments to reduce dependence on external borrowing and generate the fiscal space needed to invest in infrastructure and social services. The programme will also include capacity-building initiatives and training aligned with the African Continental Free Trade Area (AfCFTA), aimed at supporting cross-border trade and economic integration within the region. The development comes as Nigeria continues to roll out sweeping fiscal reforms under President Bola Ahmed Tinubu, with new tax policies introduced in 2026 expected to improve compliance, streamline processes, and enhance the overall business environment. The project is scheduled to run until July 2030 and will be overseen by a regional steering committee comprising representatives from WATAF, ECOWAS, and participating countries.