South Africa, for this year’s World Economic Forum on Africa.
Several African countries are among the fastest growing economies in the world, boosted by new discoveries of oil, natural gas, and strategic mineral reserves.
But progress is being undermined by income inequalities and massive illicit capital outflows – often in the form of tax evasion and trade mispricing by extractive industries.
“Africa’s impressive growth needs to reach further,” Oxfam executive director Ms Winnie Byanyima said. “The continent’s resource boom must be harnessed to benefit all its citizens. If illicit capital continues to haemorrhage out of African countries, efforts to reduce poverty and boost economic growth will be undercut. Resource wealth should promote prosperity on the continent, not undermine inclusive economic growth, fuel corruption, or damage the environment.”
In 2010, Africa’s oil, gas and mineral exports amounted to US$333 billion. But illicit financial outflows are estimated at US$200 billion annually, dwarfing the development aid it receives.
“Too often extractive industries in collusion with corrupt government officials cheat Africa of its wealth and potential for social spending. African citizens must get their true share of extractive industry revenues and royalties paid to their governments,” said Ms Byanyima. Despite being on its way to being a pole for global growth, sub-Saharan Africa is also home to six of the top 10 most unequal countries in terms of economic disparity.
Inequality is bad for social stability, and undermines growth itself. Oxfam forecasts in South Africa, more than a million additional people will be pushed into poverty between 2010 and 2020 unless the growing inequalities are addressed.
Ms Byanyima said: “Good progress is being made towards bringing down poverty on the continent, but high inequality and corruption are threatening these gains.” Oxfam has since called for multinational enterprises operating in poor countries to conduct business responsibly by informing and consulting local communities affected by oil, gas and mining projects, and giving them the opportunity to approve or reject a project prior to the commencement of operations. Africa is taking control of its own destiny, but to meet its real potential, our leaders must stand behind those who growth is leaving behind,” said Ms Byanyima.