Source: The Conversation – Africa – By Lyla Latif, Co-Founder & Research Lead, Committee on Fiscal Studies, University of Nairobi
Public finance, or how governments at all levels raise and allocate money, is in evidence everywhere you look. That pothole destroying your car. The health clinic without medicine. The dilapidated school. Public money is not government money. It is yours, writes Kenyan finance scholar Lyla Latif in her new book Governing Public Money. Drawing on a decade of experience across 32 countries, the author sets out what ails Africa’s public finances and what could change. The Conversation Africa asked her about the book’s main themes.
What prompted you to write this book?
Most books on public finance are written by men, from institutions in the global north, about systems designed in the global north. There is not a single comprehensive treatment of public finance law focused on Kenya or, for that matter, on any African country. I wanted to change that.
But the deeper motivation was a question that had been forming across more than a decade of working inside fiscal systems. As an international tax expert and scholar, I have spent years watching how public money actually moves: through revenue authorities and treasury departments, through regional customs unions and international treaty negotiations, through county governments and sovereign debt markets.
What struck me is that everyone assumes they know what public finance is. Fewer people understand how it is governed, and fewer still appreciate how profoundly interconnected its parts are. That interconnectedness is what the book’s 11 chapters try to capture. Revenue policy shapes debt sustainability. Debt sustainability constrains budgeting. Budgeting determines what devolution can deliver. Regional integration reshapes revenue options. International treaty regimes limit domestic policy space. Technology transforms administration. Corruption corrodes everything.
No single chapter can be understood in isolation, just as no fiscal challenge can be solved in isolation.
The final chapter examines Islamic public finance. Here, I discuss:
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zakat, a mandatory wealth based contribution used to support social welfare
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waqf, an endowment dedicated to public benefit such as education or health
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sukuk, asset backed Islamic financial certificates often compared to bonds but structured without interest.
I argue that these are fiscal institutions within a legal tradition that colonial administration suppressed but never displaced. Writing that chapter felt like an act of intellectual justice.
What are the key messages on public finance?
The book opens with a memory. During the frequent power cuts of my childhood in Nairobi, my father would gather us around candles and draw. One evening he sketched a woman carrying water on her head and a child on her back, walking toward a distant horizon.
I did not then understand that the darkness itself was fiscal: the consequence of under-investment, deferred maintenance, and policy choices that left entire communities without reliable electricity. That image captures the book’s central argument. Public finance is not a technical subject confined to treasury officials and economists. It is the means through which societies either raise living standards or entrench dependence.
Every unbuilt school, every underfunded clinic, every collapsed road is a fiscal failure before it is anything else. And every act of governance, from defending a nation’s borders to delivering clean water, ultimately resolves into a fiscal question.
The book argues that law does not merely regulate public finance; it constitutes it. The authority to tax, to borrow, to spend, and to hold officials accountable derives from legal instruments. Kenya’s 2010 constitution devotes an entire chapter to public finance, establishing principles of equity, transparency and public participation. These are not decorative provisions. They are the architecture through which fiscal power is authorised, constrained and contested.
Yet the book is equally insistent that legal frameworks do not determine outcomes. The gap between what constitutions promise and what citizens experience is shaped by political economy: by who holds power, whose interests prevail, and what international forces constrain domestic choices.
How is Africa disadvantaged in the international fiscal system?
Africa’s disadvantage is not accidental or temporary. It reflects a continuing structure shaped by history and reproduced through modern international rules. Colonial fiscal systems were designed for extraction, not development.
In Kenya, the Native Hut and Poll Tax Ordinance of 1910 compelled African populations into wage labour to meet obligations denominated in colonial currency. Revenue was directed towards the Uganda Railway and export corridors serving London rather than towards African education or health.
As Kenyan scholars George Ndege, Ahmed Mohiddin and I have documented, colonial administrations relied on indirect taxes that fell hardest on African populations. They directed expenditure towards export infrastructure serving metropolitan markets and concentrated authority in executive hands with minimal accountability.
Independence brought formal sovereignty but did not dismantle the international architecture within which African fiscal governance operates. Tax treaties, negotiated primarily among developed countries, allocate taxing rights in ways that systematically favour capital exporters. The status quo allows multinational enterprises to derive substantial income from African markets without triggering source country taxation.
Investment treaties expose African governments to billion dollar arbitration claims when they adjust fiscal policy. Trade agreements constrain tariff choices that might support industrial development. African countries have been positioned as passive recipients of rules rather than their authors. The frameworks that govern cross border taxation, sovereign debt restructuring and investment protection were designed in forums where African states had little or no voice.
For over 60 years, the rules governing cross border taxation have been written principally within the OECD, a body of wealthy capital-exporting states where African countries had no seat.
Thanks to African advocacy, a new UN Framework Convention on International Tax Cooperation adopted in 2023 is changing that. The convention creates space for binding obligations on cross border services, digital economy taxation and illicit financial flows. These are areas where voluntary frameworks have consistently failed the continent.
This represents the most significant shift in international tax governance in decades.
African states are beginning to write rules rather than merely absorb them.
What could countries and citizens change?
The most consequential shift would be for African countries to look inward. That means confronting the revenue gap that defines African fiscal governance. The continent’s average tax-to-GDP ratio remains below 16%, well beneath what is needed to fund basic public goods without chronic dependence on external financing.
This requires building professionally independent revenue authorities, transparent public financial management, and the political will to tax wealth and rents that elite capture has long shielded. It also means developing indigenous fiscal scholarship rather than importing policy knowledge from Washington, Paris and Geneva.
Looking inward is not autarky, meaning a withdrawal into economic self sufficiency and disengagement from global exchange. Rather, it is about consolidating internal clarity and capacity so that engagement outward happens on African terms. My colleague Daniel Nuer, a senior official at the Ghana Revenue Authority, once said to me:
If Africa starts looking inward, every non-African state will be forced to comply with African approaches.
There is a quiet but powerful logic in that observation. When African countries strengthen domestic revenue mobilisation, they reduce dependence on aid and on borrowing from international markets on terms set by creditors. When they build effective tax administrations, they create the institutional capacity that underpins state legitimacy.
When they coordinate regionally, such as through the East African Community or the African Continental Free Trade Area, they create the scale that individual economies cannot achieve alone. As African revenue systems become more effective, the current international architecture, built on the assumption that developing countries will remain rule takers, becomes unsustainable.
A continent that mobilises its own resources, governs its own debt, and taxes its own digital economy does not need to accept frameworks designed elsewhere for the benefit of others. That is not merely a hope. In 2024, African states voted for a multilateral tax convention over the opposition of the world’s wealthiest countries. The African Continental Free Trade Area is building the coordinated market that no single African economy can sustain alone.
But fiscal sovereignty does not emerge in ideal conditions. It must contend with structural pressures that continue to narrow policy space. Sovereign debt repayments are absorbing resources that should be financing development, while illicit financial flows drain more from the continent each year than it receives in aid. What is shaping Africa’s fiscal future, then, is not the abstract market logics often associated with Adam Smith, but deliberate political choices about how public money is governed and how power over it is exercised.
Consequently, citizens have a role that extends beyond compliance. The fiscal contract between state and citizen depends on both sides. Governments must mobilise resources equitably and deploy them transparently. Citizens must demand accountability and participate in the budget processes that constitutions – such as Kenya’s – now require.
Civil society organisations and investigative journalists have proven essential in exposing fiscal failures that formal institutions missed. The work ahead is neither simple nor quick. But the direction is clear. African fiscal governance must be built from African foundations, informed by African needs, and accountable to African citizens. That is what governing public money should mean.
Lyla Latif does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Africa’s public finances are in a mess: a new book explains why and what to do – https://theconversation.com/africas-public-finances-are-in-a-mess-a-new-book-explains-why-and-what-to-do-275761
