The African Development Bank (AfDB) has estimated the potential of Africa’s informal sector revenue to be around $125 billion, while calling on countries on the continent to make deliberate efforts to harness these potentials efficiently.

Vice President for Economic Governance and Knowledge Management, and Chief Economist at the African Development Bank Group (AfDB), Prof. Kevin Chika Urama, stated this while delivering an address at the African Economic Conference 2026 in Abidjan, Cote d’Ivoire with the theme, ‘Strengthening Africa’s Financial Agency in a Multipolar World.’

He noted that Africa has key additional revenue sources, urging countries to take a closer look at these revenue sources while noting that long-term institutional capital has the capacity to generate $4 trillion AUM.

“Pension funds potential addition is estimated to be about $500 billion 2026-2027 if converging to best practices (East Asia and Pacific: 31 % of GDP vs. Africa: 16.8%. Also, Natural Capital Valuation is about $66.1 billion while formalization of the Informal Sector has revenue potential of $125 billion,” he said.

Professor Urama however noted that realizing Africa’s potential requires decisive actions to: “increase transparency and accountability systems, strengthen institutions, improve public investment efficiency and address corruption and reduce leakages.”

Others include “Reduced implicit tax burden, higher voluntary tax compliance, reduced unemployment, inequality and poverty, strengthen social contract, drive structural transformation, strengthen economic stability, investing in Human Capital among others,”

Also speaking on the need to reduce debt and encourage voluntary tax contributions, he noted that the African Economic Outlook report showed that citizens are willing to be in the tax bracket, provided that they can see that the tax administration systems are simplified.

“If they can see fiscal prudence amongst the government elites, which simply means that their tax resources are being used productively to deliver on public services, and they can link their taxes to delivery of public services, they will willingly pay. This is general, it’s not for one country or the other. And then once you do that as a government, it’s a win-win, because you will now be able to expand your tax bracket and you will be able to get more taxes without having to increase the tax rate.

“And our estimates show that by doing that in Africa in general, not in a particular country, you are able to raise tax resources from tax resources alone by $469.4 billion, and then non-tax resources by $311.4 billion. So that’s over $780 billion waiting to be harnessed simply by simplifying tax rules, tax administration processes, showing fiscal prudence and delivering on public service for citizens more. And if we do that, we will be able to mobilize that resource,” he added.

Earlier in his opening remarks, African Development Bank Group President Dr. Sidi Ould Tah emphasised the need for Africa to rise up to global relevance.

“For decades, discussions about Africa have focused on dependency, vulnerability and adaptation. Today, we must focus on autonomy, resilience, competitiveness and influence. Africa’s geopolitical autonomy will be measured by its ability to negotiate from a position of strength, shape the rules of the game, translate its collective interests into collective action and ultimately influence outcomes,” he said.

Also in his remarks, UNDP Africa Chief Economist Raymond Gilpin said the African Economic Conference serves as an avenue to unpack solutions to address Africa’s financial and economic challenges.