Impact of Macroeconomic Instability and Regulatory Policy Uncertainty on Tax Revenue Mobilization in African Oil-Exporting Countries: Evidence from CS-ARDL Analysis

Purpose: This paper examines the effects of macroeconomic instability and regulatory policy uncertainty on tax revenue mobilization in African oil-exporting countries within a period spanning from 1990 to 2023.

Design/methodology/approach – The study adopts the Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) approach to evaluate both the long-run and short-run dynamics. Eight African oil-exporting countries were analyzed with an interaction term to examine the compounded effects of macroeconomic instability and regulatory policy uncertainty.

Findings: The findings suggest that macroeconomic instability and regulatory policy uncertainty reduce tax revenue in both the short and long run, with interaction between the two variables amplifying the negative effect. On the other hand, oil rents, financial development, and government expenditure enhance revenue mobilization consistently.

Research limitations/implications – The findings are limited to eight oil-exporting countries and may not generalize to non-oil economies. Other African countries need to be studied in the future, along with additional institutional and governance factors.

Practical implications: improvement in tax revenue collection requires stable macroeconomic conditions, predictable regulatory policies, and enhanced financial and institutional frameworks.

Social implications: Increased tax revenue mobilization fosters the delivery of public services and economic development, enhancing welfare in resource-dependent countries.

Originality/value – This study represents one of the first attempts at an explicit analysis of how the combined role of macroeconomic instability and regulatory policy uncertainty affects tax revenue mobilization, controlling for cross-sectional dependence and slope heterogeneity, thereby presenting robust and context-specific evidence.

Keywords: Tax revenue mobilization, Macroeconomic instability, Regulatory Policy uncertainty, CS-ARDL.