adminThe report, which was released on Friday at the World Economic Forum on Africa, noted that the natural resource revenues are, in fact, widening the gap between the rich and the poor.
The African Progress Panel, chaired by former United Nations Secretary-General Koffi Annan, says Africa can “better manage” its vast natural resource wealth, to improve the lives of its one billion population.
It says the continent loses twice as much in illicit financial outflows as it receives in international aid.
“The Africa Progress Panel is convinced that Africa can better manage its vast natural resource wealth to improve the lives of the region’s people by setting out bold agendas for strengthening transparency and accountability,” it said in a Press statement.
“However, international tax avoidance and evasion, corruption and weak governance represent major challenges.
“The report therefore welcomes the commitment from the current G8 presidency, the United Kingdom and other governments, to put tax and transparency at the heart of this year’s dialogue.
It also urged all OCED countries to recognise the cost of inaction in this vital area.
“The African Progress finds it unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits, while millions of Africans go without adequate nutrition, health and education.”
The report highlights five deals between 2010 and 2012, which is says could have cost the Democratic Republic of Congo over US$1,3 billion in revenue through the undervaluation of assets and sale to foreign investors.
The amount represents twice the annual health and education budgets of a country with one of the worst child mortality rates in the world and seven million schoolchildren.
Mr Annan expressed concern over massive tax evasions and under-declaration of assets.
“Tax avoidance and evasions are global issues that affect us all,” he said. “The impact for G8 governments is a loss of revenue. But in Africa, it has direct impact on the lives of children. Throughout the world, millions of citizens now need their leaders to set up to the mark and lead. Fortunately, momentum for change appears to be accelerating.”
The report identifies a shared agenda for change and this includes African governments improving their governance and strengthening national capacity to manage extractive industries as part of a broader economic and developmental strategy.
It says African governments should put in place transparency and accountability at the heart of the natural resource policies, secure a fair share of natural resource revenue for their citizens and spread the benefits of this revenue via equitable public spending. International businesses should follow best practices on transparency, help build national capacity, procure more products and services locally and raise standards in areas of corporate accountability and responsibility.
Graca Machel, president of the Foundation for Community Development and founder of the Graca Machel Trust and member of Africa Progress Panel said: “This report makes a critical contribution to debates on Africa’s natural resource wealth. If its recommendations are taken, Africa will accelerate progress towards the Millennium Development Goals.
“More kids will go school, fewer women will die in birth child and more children will survive their childhood.”
Econet Wireless founder Mr Strive Masiyiwa said: “While some major companies show outstanding leadership on transparency, others show a disregard for ethics and human lives.
By cheating the system, they make it harder for honest business.”
Online Reporter