Buildings in Abidjan’s business district on the horizon, with informal housing in front, in the Ivory Coast.
Two Africas … buildings in Abidjan’s business district on the horizon, with informal housing in front, in the Ivory Coast.
United Nations Under-Secretary-General; Executive Director, Joint United Nations Programme on HIV/AIDS (UNAIDS)
Pan-Africa program director, Oxfam International
This article is part of the World Economic Forum on Africa
Africa is ready to rise. This is what we will keep repeating as Africa’s government and business leaders meet in Cape Town this week at the World Economic Forum (WEF) Africa Meeting.
Rarely have we felt such fiery potential on Africa’s horizon. Consider how Africa’s best-educated generation ever is coming of age – by 2025, half of our continent’s population will be under 25. These young women and men are by far Africa’s best natural resource, more valuable than all the gold, copper, oil and gas that lies under African soil – though we have a lot of that too!
Consider how Africa is readily seizing renewable energy – the speed at which off-grid solar is expanding is exhilarating, for example. Consider how our people are pioneering technologies to solve problems. Or indeed the opportunity of the new Africa continental free trade are, set to be the world’s largest.
This is reason to hope. And yet we must sound caution. There is no avoiding one inescapable truth: that Africa is not really rising yet. Oxfam arrives in Cape Town with new data that tells a story of:
• A divided Africa – in which inequality is spiralling. That is now home to the world’s four most unequal countries.
• An Africa for the ultra-rich. Where three African billionaires – all men – now hold more wealth than the poorest half of Africa, or 650 million people on our continent.
• An Africa racing to the bottom. Despite having some of the fastest growing economies on the planet – the latest World Bank data shows us that extreme poverty is once again rising in Africa. Hundreds of millions more Africans are just a medical bill or a crop failure away from falling into extreme poverty.
Welcome to a Tale of Two Continents, an Africa that’s tailored for the super-rich, while hundreds of millions of people are stuck in poverty without a chance of a dignified future. Even the great new opportunities of digital technologies and continental trade risk being captured by the old entrenched wealthy interests.
We can do far better. It’s a broken and rigged economic system that must change.
We can start by investing in public services like health and education: the clearest path to reducing inequality and investing in Africa’s people, our most important asset. Ethiopia is a standout example here: Though a poor country, Ethiopia has committed to social spending and has raised its education spending to 23% of the budget – the sixth highest in the world. In a decade, it brought 15 million more children into school. That is leadership.
Mostly girls have benefited from this. The opposite is true when education, health and social protection system are underfunded and of poor quality. In Kenya, a boy from a rich family has a one in three chance of continuing his studies beyond secondary school. A girl from a poor family has a one in 250 chance of doing so. And when healthcare systems fail, women and girls are left with the task of caring for loved ones, diminishing their opportunities.
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This will get worse unless governments rise to the challenge of a new continental debt crisis. African and world leaders must play their part in pushing for an early solution to restructure debt – one that prevents a cascade of countries falling into default and economic depression and carving down essential public services. We’re already seeing spiralling debt repayments putting social spending at risk in countries from Angola to Ghana.
Yet let us be in no doubt: Africa has the wealth to invest. We can fund Africa’s rise by taxing the rich so they pay their fair share – not squeezing the poor woman fruit-seller through indirect taxes like VAT. Challenging global tax rules would also help tackle the theft of wealth from the continent: Super-rich Africans are holding 75% of their wealth in offshore accounts, denying Africa $14 billion annually in tax revenues.
A recent Oxfam and Tax Justice Network Australia report exposed how one foreign mining power was costing the continent around $300m in lost tax revenue. That’s enough money to fund malaria control – an essential part of health programmes in the nine sub-Saharan countries in which Australian mines operate, almost seven times over.
With some imagination and courage, African leaders can fight this crisis. We can look to countries like Namibia, which has reduced inequality since 1993. Or Sierra Leone, now increasing the minimum wage and personal income tax. Or how South Africa ensures everyone over 60 years old receives a pension, except the very richest. All can do more – but they prove action is possible.
African political and business leaders must feel the heat about the choices they are making. They can stay on the path of ever-spiralling inequality and poverty. Or they can start building another path, to a more prosperous, equal Africa built for the many and not just for the few. Surely, there is no other way.