## Developing Countries Feel Squeeze From Lower Natural Resource Revenue, Falling Foreign Aid

_IMF Blog, May 4, 2026_

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**Canonical URL:** [Developing Countries Feel Squeeze From Lower Natural Resource Revenue, Falling Foreign Aid](https://www.imf.org/en/blogs/articles/2026/05/04/developing-countries-feel-squeeze-from-lower-natural-resource-revenue-falling-foreign-aid)

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## Bibliographic details
- Authors: Mario Mansour, Faycal Sawadogo
- Published: May 4, 2026

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### Key findings
- Nontax revenue from natural resources extraction and foreign aid grants for general spending have fallen by a combined 3.8 percent of gross domestic product since 2000.
- Gains from tax collection since 2000 amounted to just 2.6 percent of GDP, offsetting only two-thirds of the decline.
- The decrease in proceeds from nontax extractive revenue was the biggest driver of the overall drop for both low-income developing countries and emerging market economies.

### Main drivers and characteristics
- Nontax extractive revenue refers to royalties, profit sharing, and dividends from state-owned enterprises in industries like oil, gas, and mining.
- Declining foreign aid grants for general spending also contributed to lower public revenues.
- These revenue shifts increase fiscal pressures and reduce the reliability of public financing sources in affected developing countries.

### Policy implications and recommendations
- Closing the revenue gap often requires collecting more tax revenue.
- Affected countries need sustained investment in domestic tax policy and tax administration.
- Effective institutions are essential to underpin reforms in tax policy and administration.
- Capacity development—customized technical assistance and training, often delivered in collaboration with donor countries and other international organizations—supports building expertise and policy frameworks to improve tax systems and institutions.
- Strengthening domestic revenue mobilization reduces dependence on volatile and declining revenues from extractive industries and foreign support, contributing to fiscal resilience and global economic growth.

### Data and analytical resources
- The IMF’s World Revenue Longitudinal Database tracks decades of tax and nontax revenue consistently across 195 economies using data provided by IMF members.
- High-quality granular data are required to evaluate how governments can raise more reliable, sustainable revenue from within the economy and to identify reform priorities.

*Mario Mansour and Fayçal Sawadogo — May 4, 2026. IMFBlog, "Developing Countries Feel Squeeze From Lower Natural Resource Revenue, Falling Foreign Aid."*

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## References

- [World Revenue Longitudinal Database](https://www.imf.org/en/topics/fiscal-policies/world-revenue-longitudinal-database)

_Source: https://www.imf.org/en/blogs/articles/2026/05/04/developing-countries-feel-squeeze-from-lower-natural-resource-revenue-falling-foreign-aid_