Although Africa has remained a hub for many foreign countries by offering exciting investment opportunity, there is need for stable business environment, responsible investment and business practices, says Kofi Annan.
Kofi Annan, who heads Africa Progress Panel, says that in Africa’s oil, gas and mining sectors, multinationals make use of shell companies in offshore tax havens to evade taxes.
“These practices weaken disclosure standards and undermine the efforts of reformers in Africa to promote transparency,” he says, adding that the practices facilitate tax evasion and, in some countries, corruption, draining Africa of revenues that should be deployed against poverty and vulnerability.
Africa is among the front-runners in economic growth in the world. It also has abundant natural resources and a large, youthful workforce, making it a region with tremendous investment opportunities. However, many Africans remain stuck in poverty, since investments in natural resources and agriculture have so far done little to boost government revenues, reduce poverty and inequality, and create jobs.
“Natural resource plunder is organized theft disguised as commerce. Commercial trawlers that operate under flags of convenience, and unload in ports that do not record their catch, are unethical. All these criminal activities compound the problem of tax evasion and shell companies,” Annan reveals.
Africa Progress Panel believes that by supporting transparent investments and paying fair taxes, US multinationals can help fight poverty and hunger, and increase the government revenues that pay for education and health infrastructure in Africa.
With two-thirds of Africans depending on farming, boosting agriculture is an effective way to reduce poverty and inequality. “We have to significantly boost our agriculture and fisheries, which together provide livelihoods for roughly two-thirds of all Africans,” Annan says.
United States can help Africa achieve its potential
Annan notes that Africa can be a major part of the solution to many of the world’s great challenges. It can help drive global growth, reduce poverty and inequality, improve health and counter the threats of terrorism and climate change
He believes that United States can help Africa to achieve its potential through the cultivation of stronger links with African countries. “The United States must, of course, work with today’s African leaders, but ignoring political reality is not in the interests of Africa or America,” Annan adds.
U.S. security assistance must be focused on those who respect democratic norms. The wars on terror and drugs should not be conflated nor used as a justification for providing military assistance to regimes that abuse or neglect their people. Such aid can backfire, as seen in Mali.
Africa Progress Panel says that Africa needs wider investment, as well as more trade and greater access to markets, to help expand prosperity. Agriculture, which still employs two-thirds of Africa’s workforce and makes up a third of its gross domestic product, must be a priority. Africa remains the only continent that cannot feed itself — a deeply worrying fact given that its population is projected to double by 2050 and that climate change is forecast to hit Africa hard. U.S. investment and technical know-how to support sustainable farming techniques is vital.
Annan says that Africa will only become a stable and vibrant partner for the United States, and the world, if it provides opportunities for all its people. This requires peaceful, stable and democratic government.