Money Talks: Africa at the G7
At their forthcoming summit in Germany, G7 leaders will meet some of their African counterparts to discuss how they can support economic growth and sustainable development in Africa. The continent has enjoyed a recent economic boom, but countries across the continent remain blighted by poverty and inequality.
Africa is among the world's fastest-growing continents, but the rich world is reaping the rewards of this growth, as billions of dollars a year flow out of Africa. In Money Talks: Africa at the G7 , Oxfam looks at how this is depriving Africa of vital revenue that could enable it to fund healthcare and education for all, and invest at scale in sustainable agriculture.
In 2010 alone, G7-based companies and investors cheated Africa out of an estimated $US6bn through just one form of tax dodging – trade mispricing. This is equivalent to more than three times the amount needed to plug the funding gaps to deliver universal primary healthcare in the Ebola-affected countries of Sierra Leone, Liberia, Guinea and Guinea Bissau. At the same time, rich-country donors, including some G7 countries, continue to default on other vital income streams for Africa, as they break their promises on aid and on providing new and additional contributions to climate finance.
If G7 leaders are serious about supporting economic growth and sustainable development in Africa they must support ambitious and comprehensive reform of the global tax rules that allow multinational companies to dodge taxes and that fuel a "race to the bottom" where governments offer ever more generous tax breaks to persuade companies to locate in their country. These rules are letting multinational companies prosper, while bleeding Africa dry of vital revenue.
G7 governments must seize the opportunity to make ambitious commitments on tax and aid leading up to the UN Financing for Development Conference in Addis Ababa in July. They must recognize this period as critical in securing the changes that Africa needs to ensure long-term, sustainable, equitable growth.