Several African countries are among today's fastest-growing economies
in the world, often driven by discoveries of oil, natural gas and
strategic mineral reserves. Extreme poverty on the continent, overall,
is in decline. This is good news!
However, millions of Africans are not benefitting from this
impressive growth. Sub-Saharan Africa is home to a third of the world's
poorest people, and six of the world's 10 most unequal countries are in
Africa.
This inequality is dimming Africa's potential, undermining the
ability of poor people to access the essential services they need -
basic health and education - to be fully productive citizens.
The private sector is the engine of Africa's economy and, if it works
responsibly, holds the key to fair and sustainable economic
development.
Companies can contribute greatly to tackling poverty through their
core business strategies, provided they move beyond mere corporate
social responsibility, and towards business models that genuinely
include people living in poverty, and treat them fairly. That includes
paying their fair share of taxes.
Unfortunately, Africa loses more through illicit outflows than it
gets in aid and foreign direct investment. Tax evasion and trade
mispricing by multinational oil, gas and mining companies, in collusion
with corrupt officials, is a serious problem. Africa's natural resource
wealth has the potential to lift millions of people out of poverty, but
illicit capital flows and income inequalities are cheating Africa of its
potential.
Africa must not be perpetually confined to managing poverty.
Ultimately, African countries can raise their own finances, from within
their own borders, to pay for long-term sustainable development. To do
this, they must strike a balance between investment-friendly policies
and securing revenue through fair tax regimes, and allocating the
proceeds to support basic services and development. Having sat on the
Uganda parliamentary budget committee that oversees budget allocations,
and the public accounts committee that oversees public expenditures, I
know that it is possible for most countries in Africa to raise the
resources they need to fund their development priorities.
As the Africa Commission has said, "History has shown us that
development cannot and does not work if policies are shaped and forced
by outsiders". But Africa cannot do it alone. Africa's people,
governments, business leaders and the wider international community must
act in concert to ensure that the revenues from natural resources, set
to increase over the next decade, will create opportunities for growth
and for human development.
For now, bilateral aid remains an important source of finance for
many countries. Pulling the plug on aid now - or even in five or ten
years' time - would mean vast increases in poverty and major reverses in
development progress. Our challenge is to make development assistance
work as a better catalyst to support revenue administrations and
regulatory systems.
In the long run, this is the road that will lead Africa away from the need for aid, and towards meeting Africa's promise.
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