Wednesday, July 31, 2019

Africa's wealth gap

Oxfam’s new report, The West Africa inequality crisis, recommends “scrapping unnecessary tax incentives” and increasing overall tax progressivity by expanding taxes “typically paid by the rich,” among a host of other policy moves that aim to “redistribute from the rich to the poor.” 

Tackling inequality, the new Oxfam analysis stresses, will always be “critical to the fight against extreme poverty.”

“Indeed, unless countries significantly close the gap between the richest and the rest,” Oxfam concludes, “ending extreme poverty will remain just a dream.”

In West Africa, the African continent’s most unequal region, the richest 1 percent hold more net worth than the entire bottom 99 percent. The West African governments these top 1 percenters dominate do less than any other governments in Africa to advance social well-being. They spend the continent’s least on the "most essential elements of a dignified life"—quality schools, health care, and decent jobs.

In Africa overall, wealth jumped 13 percent in the decade ending in 2017, the most recent year with good numbers available. Wealth in Nigeria increased 19 percent.

These increases, Oxfam notes, should have created “an enormous opportunity to improve the lives of the many.” Nigeria, adds Oxfam, "has the worst score on social spending, not only in Africa but in the world."

Instead, the increases have essentially “benefited only a select few.”

Nigeria’s richest elites now enjoy world-class status. The five wealthiest Nigerians currently hold a combined fortune worth $29.9 billion, for just about a $6 billion average, a big-league bundle in anybody’s ballpark.

Nigeria’s single richest individual, Oxfam calculates, annually earns enough income off his wealth to take 2 million poor Nigerians out of poverty every year. Think about that for a moment. Nigeria’s richest man could significantly improve the well-being of 2 million desperately poor souls in 2019 and still end the year every bit as rich as when the year started.  He already, Oxfam helpfully points out, “earns about 150,000 times more from his wealth than the poorest 10 percent of Nigerians spend on average on their basic consumption in a year.” Nigeria’s wealthiest individual could spend $1 million a day and still not run out of money for 46 years.

West African governments choose to steer their resources to be quite generous with tax incentives for multinational corporate giants. The amount they dedicate annually to these corporate subsidies, Oxfam researchers point out, “would be enough to build about 100 modern and well-equipped hospitals each year in the region.”

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