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This research investigates how taxation influences digital finance adoption in Africa while assessing the moderating effect of governance quality.

June 4, 2026EconomiesOpen Access

Effect of Taxation on Digital Finance Adoption in Africa: The Role of Governance Quality

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Randomized trial examines the effect of taxation on digital finance adoption in Africa, suggesting governance quality enhances this relationship.

This research investigates how taxation influences digital finance adoption in Africa while assessing the moderating effect of governance quality.
Analyzed panel data from 54 African countries from 2007 to 2023.
Applied two-step System GMM for analysis of taxation impact on mobile money adoption.
Examined interaction terms regarding governance effectiveness and corruption control.
Taxes on goods and services significantly boost mobile money adoption rates in Africa.
Governance quality enhances the positive impact of taxation, with stronger institutions yielding higher adoption rates.
Findings remain consistent across various tax measures and analytical controls.

Babacar NDIAYE (2026) studied this question.

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Randomized trial examines the effect of taxation on digital finance adoption in Africa, suggesting governance quality enhances this relationship.