If well managed, natural resource prosperity can be a key driver for growth and socio-economic transformation to counter COVID-19 consequences.
Nairobi, 5de November 2020 – Africa will not achieve the Sustainable Development Goals (SDGs) to eliminate extreme poverty by 2030. This slow progress is due to resource leaks and increasing poverty rates, as 64.3% of sub-Saharan Africa is still living in multidimensional poverty. While other regions of the world are experiencing a rapid reduction in poverty, the decline is much less for sub-Saharan Africa. Report on Human Development – 2019.
Because COVID-19 has exceeded the resources needed to fund essential services such as education and health in Africa, the increased continental debt burden and the limited inflow of aid and foreign development investment, there is more pressure than ever to raise local revenue . Africa must be able to raise the necessary funds if the channel that allows capital flight and illegal financial flows (IFFs) can close. The lost funds come mainly from the extraction sector in Africa, while Africa is still the poorest continent in the world. The 2020 UNCTAD report on economic development in Africa shows that the extraction sectors lose about $ 50 billion annually. ” The extraction sector was the largest source of IFF from Africa. Given the pressure on governments to mobilize financial resources to mitigate the negative impact of COVID-19, the extraction sector offers strategic potential to be generated to raise the required resources. ”Says Alvin Mosioma, the executive director of Tax Justice Network Africa (TJNA).
Public policy needs to be rethought and strategies used to address Africa’s vulnerabilities, made more visible by Covid-19. Oil, gas and minerals are finite resources. The more they are withdrawn, the more they lose the opportunity to develop based on it. The multinational enterprises (MNCs) in the extraction sector unfortunately do not pay their fair share, and the development of Africa on the basis of its natural resources remains an unattainable dream. In this regard, Africa Mining Vision (AMV) and the High-Level Panel (HLP) report on IFFs have made recommendations to optimize domestic resource mobilization and leverage on the extraction sector to achieve inclusive and sustainable growth.
TJNA calls on African governments to improve the transparency and accountability of MNCs, to end secret jurisdiction and tax havens, and to promote the automatic exchange of information and citizen participation in extraction management. In addition, countries need to review policies that allow for excessive tax incentives, and publicly report on the revenue forgotten to subsidize the MNCs.
To provide a forum to discuss these issues, the Pan African Conference on Illicit Financial Flows and Taxation (PAC) will bring together members of parliament, policymakers, researchers, academia, government representatives, media, international development partners and civil society representatives of gather across the country. the continent. PAC 2020 will be a week-long virtual event and will focus on the leaks of domestic resource mobilization in the extraction sector. This conference will be broadcast live on the TJNA YouTube channel.
Contacts: Cynthia Umurungi, Communications Officer, pos: cumurungi@taxjusticeafrica.net