Video: 2013 Africa Progress Report: Equity in Extractives (source: Africa Progress Panel)
"Africa is standing on the edge of enormous opportunity and African policy makers and their partners have critical choices to make. They can either invest their natural resource revenue in people to generate jobs and opportunities for millions in present and future generations. Or they can squander this opportunity, allowing jobless growth and inequality to take root".
"Africa is standing on the edge of enormous opportunity and African policy makers and their partners have critical choices to make. They can either invest their natural resource revenue in people to generate jobs and opportunities for millions in present and future generations. Or they can squander this opportunity, allowing jobless growth and inequality to take root".
The extractive industry in Africa is mired in a disturbing paradox. Of course, the benefits of revenue windfall are are not seen. Livelihoods of people have even worsened in these resource-rich countries. What are the reasons behind this? The few revenues that governments get are squandered through gross mismanagement. Even scandalous is the fact that more of these revenues do not reach these governments. Mispricing and illicit financial deals are used by multinational companies to evade taxes. These transfer mispricing and illicit deals have a huge toll. According to the Africa Progress Report 2013, Africa loses $34 billion annually through trade mispricing. The only trusted tool in our hands now to engage is transparency. With the wave of transparency reforms, it goes without saying that the solution for damaging secrecy and illicit financial deals that have characterised the extractive industry in Africa is within reach. The 2010 Dodd-Frank Act in the US, the EU Transparency and Accounting Directives, among others are important in sustaining the fight against secrecy in the extractive industry. It must be noted that tax evasion and illicit financial deals are not only an African phenomenon. Advanced economies lose vast amount of revenues through tax evasion: the EU, for example, has put this high on its agenda. This makes the situation more urgent.
Let the world embrace transparency: the only visible tool that empowers the citizenry to hold their governments to account. Transparency is again the potent platform of shedding the light on secret deals for Africa governments to get their fair share of revenues. Extractive industry must contribute to poverty reduction and spur economic growth.
By: Stephen Yeboah (profstephenyeboah@gmail.com).
