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Radical transformative agenda Africa
08
Jun

‘Radical transformative agenda’ possible in Africa…

Better tax administration would help African countries adopt transformative social protection policies such as minimum income schemes to spur development and ensure nobody is left behind, a report has suggested.

Better tax administration would help African countries adopt transformative social protection policies such as minimum income schemes to spur development and ensure nobody is left behind, a report has suggested.

The Mo Ibrahim Foundation, which conducts research hoping to foster change in Africa, has produced a report into Covid-19’s effect on the continent and outlined several ways leaders could help their people out of the crisis.

One such method is basic income: a system of cash transfers aimed either universally or targeting a specific group of people, such as families, those in poverty or informal workers.

“The pandemic showcased the continent’s lack of social safety nets,” the report said.

“Going forward, transformation must be inclusive and leave no one behind.”

The report pointed to a trial in Kenya that identified positive impacts on consumption, food security, assets, revenue from self-employment and psychological wellbeing, as well as a reduction in sexual and gender-based violence.

A scheme in Zambia targeting families with children under five led to recipients improving their standard of living by buying productive assets (i.e. those that generate money) and diversifying their work.

According to a United Nations Development Programme working paper, it would be feasible to implement a temporary basic income scheme in sub-Saharan Africa at a cost of between 0.76% and 2.71% of the region’s GDP.

But public revenue in Africa is unreliable, the Mo Ibrahim Foundation report said, because it relies on “volatile” taxes on resources such as oil and metals.

To sustain the recovery, and implement programmes such as minimum income, fiscal capacity must be increased, it said.

“Domestic resource mobilisation can be expanded through stronger tax administration, better enforcement of tax laws, formalisation of informal trade, and innovative taxes, such as [a] digital services tax,” the report said.

“Perhaps most importantly, the drain of resources through illicit financial flows must be halted.”

The report said that by 2040 Africa will have “the largest potential workforce in the world”, providing the opportunity for rapid development, if the right policies are put in place for the recovery.

“While the previous decade’s growth failed to provide Africa’s potential workforce, particularly the youth, with enough relevant jobs and opportunities, the current crisis can provide the impetus to build back stronger in the coming decades,” it said.

“It is a unique opportunity to transform Africa’s jobless, inequitable, and fragile growth model into an African-owned model that is self-reliant, resilient, inclusive and green.

“In order to achieve this, the continent must pursue a radical transformative agenda, leveraging its vast untapped potential while building on pre-existing areas of strength.”

Written by: Calum Rutter

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