Historical Development of Fiscal Policy Operation among Sub-Saharan African Countries

Abstract

In recent decades, economists and historians have increasingly turned to Africa’s colonial past to explain contemporary differences in economic outcomes – especially fiscal stance within the African continent, as well as differences between Africa and other regions of the world. This study joins the debate by exploring the historical records of colonial state finances to see their development and possible link with recent fiscal outcomes among Sub-Saharan African countries. The study applies simple descriptive statistical tools for the analysis of data. The study found that taxes constitute the financial and political backbone of the colonial state and were vital to the state building efforts of colonial governments. Similarly, there are significant differences and similarities between British and French territories in terms of tax administration and expenditure policies. In addition, there is greater importance on education expenditure in British colonies, stronger reliance on direct taxation in French colonies. The remarkable achievements in fiscal policy reforms by some SSA countries in recent years has its root to colonial era. To consolidate the gains and to tackle the challenges, it is imperative that SSA policy makers commit themselves – and remain firmly committed – to sound fiscal policies to ensure sustainable growth and development.