Africa and its partners could
lose out on the enormous opportunities that natural resources offer. This was
said by Mr. Kofi Annan in his speech delivered at the Graduate Institute of
International and Development Studies (IHEID) on September 26, 2013 to mark the
opening of the 2013-2014 academic year in Geneva. “Africa and its partners will
miss the opportunity to transform the lives of future as well as present
generations, however, if they carry on with business as usual”, Mr. Annan
warned.
Kofi Annan recounted the
challenges that confront Africa’s extractive sector. He stressed that though natural
resource wealth rightly belongs to the continent’s citizens, the “citizens are
being robbed of its benefits by revenue diversion, corruption, jobless growth,
and rising inequality.”
Africa’s impressive economic
growth in the past decade has largely been driven by natural resource boom. However,
this growth has done little to reduce poverty and improve the living standards of
the people particularly those in resource-rich countries.
Mr. Annan urged governments in
Africa to adopt transformational measures that will harness the potentials of
the natural resource sector. He advised that natural resources should be
processed to bring extra value before export. He again charged African leaders to adopt effective transparency and accountability measures. “African
governments must put transparency and accountability at the heart of their
natural resource policies. They must manage their citizens’ natural resources
efficiently and share the revenues fairly”.
Some African countries have made strides in ensuring transparency
by publishing oil, gas and mining contracts online. These include Ghana, Guinea
and Liberia. More to this, several resource-rich countries have subscribed to
the Extractive Industries Transparency Initiative (EITI). “Some 12 African countries
are now compliant with the Extractive Industries Transparency Initiative, which
recently announced more rigorous standards”, said Mr. Annan.
Mr. Annan indicated that
multinationals have a role to play. Though there is growing commitments to
transparency, he charged multinationals to “improve their behaviour” adding
that “they also play a critical social role and that doing good is ultimately
good for business”. He further advised multinationals that “transparent
corporate governance builds reputations, reduces political risk, and may
ultimately win more extractive contracts, too.”
Multinational companies into oil
and gas and mining extraction in Africa have often been cited to engage in illicit
practices including tax evasion and trade mispricing. The cost of these illicit
practices is staggering. The Global Financial Integrity indicates that developing countries lost an estimated $98 billion to
$106 billion annually to corporate tax dodging during the years 2002 through
2006. Africa is hard hit in these
practices. Mr. Annan also added that “trade mispricing, a technique to
lower tax payments, costs Africa an estimated US$38 billion per year, more than
the US$33 billion in foreign direct investment or US$30 billion in official
development assistance”.
He called for equitable tax
justice system that will “bring benefits for Africa and for the international community
more generally.”
BY: Stephen Yeboah, Geneva.
Read full speech of Mr. Kofi Annan here: http://bit.ly/18LS8VA
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