COVID-19 Threatens African Countries’ IGR, Others
The coronavirus (COVID-19) pandemic; has threatened African countries’ internally-generated revenues (IGR) thereby impeding their ability to fund essential services in education, health and infrastructure sectors of the economy.
According to the 2019 Human Development Report, Africa will not be unable to meet the United Nations (UN) Sustainable Development Goals (SDGs) target to eliminate poverty by 2030.
The report added: “The pandemic has exposed the urgency for African countries to harness and optimize IGR from their natural resources.
“If managed well, natural resources wealth could be a major driver of growth and socioeconomic transformation to counter COVID-19 consequences.”
The Executive Director, Tax Justice Network Africa (TJNA), Alvin Mosioma, raised the alarm in a statement Sunday in Maiduguri, the Borno State capital.
He said the slow progress derives from resource leakages and increasing poverty rates fuelled by ongoing global COVID-19 pandemic.
“About 64.3% of sub-Saharan Africa is still living in multidimensional poverty,” he lamented, while other regions of the world are experiencing rapid poverty reduction.”
According to the Human Development Report, “The decline is much slower for sub-Saharan African countries, including Nigeria, Libya, Niger, Mali, Burkina Faso, and Chad.
On dwindling IGRs, Mosioma said: “COVID-19 has overstretched the resources needed to fund essential services like education and health in Africa.
“The increased continental debt burden and limited inflows of aid and foreign development investment have put more pressure, more than ever to raise revenue locally.”
He said Africa should be able to raise needed funds; if the duct allowing capital flight and illicit financial flows (IFFs) could be closed.
He added that the lost funds mainly come from Africa’s extractive sector, and remains the poorest continent in the world.
Citing UNCTAD 2020 report on, Economic Development in Africa, he said: “The extractive sectors lose about $50 billion (N19 trillion) annually,” thereby presenting the largest illicit flows from Africa.
He continued. “Due to pressures on governments to mobilize financial resources to mitigate the adverse impact of COVID-19, the extractive sector presents strategic potential to generate and raise the required resources.”
He said there is a need to reimagine public policy, and deploy strategies that address Africa’s vulnerabilities which were made more visible by COVID-19.