Tax on Africa’s super-rich can fund Eastern and So...

Tax on Africa’s super-rich can fund Eastern and Southern Africa humanitarian needs

Audrey Galawu

A tax of up to 5 percent on Africa’s super-rich could generate an annual amount of US$11.9 billion, nearly enough to pay for the 2023 humanitarian requirements for Eastern and Southern Africa, says Oxfam in a report on inequality and global corporate power.

The organisation therefore has called upon governments to break up monopolies and enact permanent wealth and excess profit taxes as a measure to close the unequal gap between the poor and the rich in Africa.

According to Oxfam, Africa’s seven richest men own more wealth (US$52 billion) than the 700 million people who make up the poorest half of the continent’s population.

In the report, the organisation recommends that governments should tax the continent’s billionaires and companies which could realise governments more revenue.

“Reinventing inclusive and sustainable business. Competitive and profitable businesses do not have to be shackled by shareholder greed. Democratically owned businesses better equalize the proceeds of business.

“A dynamic and effective state is the best bulwark against extreme corporate power. Governments should ensure universal provision of healthcare, education and social protection and explore publicly available goods and public options in sectors from energy to transportation.

“Reining in corporate power, including by breaking up monopolies and democratizing patent rules. This also means legislating for living wages, capping CEO pay, and new taxes on the super-rich and corporations, including permanent wealth and excess profit taxes. Oxfam estimates that a wealth tax on the world’s millionaires and billionaires could generate US$1.8 trillion a year,” reads the report.

Director of Oxfam in Africa Fati N’zi-Hassane said African economies continue to make the rich richer while the poor are disadvantaged and poverty remains a menace.

‘‘African governments don’t need magic to create a more equal Africa. They just need to do their job. They must shut down the open bar of resource plundering, break up monopolies, tax the super-rich and use these resources to invest in inequality-busting policies.

“Inequality Inc.”, published today as business elites gather in the Swiss resort town of Davos, finds that seven out of ten of the world’s biggest corporations, some with significant presence in Africa, have a billionaire as CEO or principal shareholder. These corporations are worth US$10.2 trillion, equivalent to nearly four times the combined GDPs of all African countries.

‘‘Our rigged economies are benefiting the super-rich while governments are struggling to provide crucial public services like healthcare and education to Africans across the continent. Governments must step up and ensure corporations stop squeezing workers, dodging tax, and plundering our planet in their quest for massive profits. If left unchecked, these corporations will continue to widen the inequality gap,’’ N’zi-Hassane said.

In the report, Oxfam highlighted that the past three years’ accelerated surge in extreme wealth has solidified while global poverty remains mired at pre-pandemic levels.

The world’s five richest men have more than doubled their fortunes from US$405 billion to US$869 billion since 2020 at a rate of US$14 million per hour, while nearly five billion people have been made poorer. If current trends continue, the world will have its first trillionaire within a decade, but poverty will not be eradicated for another 229 years.

“Billionaires are US$3.3 trillion richer than in 2020, and their wealth has grown three times faster than the rate of inflation.

“Despite representing just 21 percent of the global population, rich countries in the Global North own 69 percent of global wealth and are home to 74 percent of the world’s billionaire wealth.

“Aliko Dangote, Africa’s richest person, holds a “near-monopoly” on cement in Nigeria. He owns Dangote Cement, which has enjoyed some of the world’s highest profit margins on cement (45 percent), while paying a tax rate of 1 percent over 15 years.

“In Nigeria, Aliko Dangote owns more wealth than the bottom half of Nigerians (109 million people). Dangote and Abdulsamad Rabiu, the country’s second richest man, have increased their fortunes by 29 percent since 2020 while the bottom 99 percent have become poorer.

“South Africa is the most unequal country in the world. The country’s billionaires’ combined wealth has increased by a third since 2020, while the bottom 99 percent have become poorer. The country’s four richest billionaires have as much wealth as the bottom 60 percent of the population (36 million people).

“Zimbabwe’s only billionaire has increased his fortune by nearly 40 percent since 2020,” further reads the report.