Tax evasion costs Africa more than $ 25 billion a year, according to a study by a network of NGOs, including the Global Alliance for Tax Justice. At a time of the fight against the Covid-19 pandemic, this flight is considered “unacceptable”, in fact it reduces the revenue that African countries could devote to their health.
Twenty-three billion dollars is the estimated amount that multinational, local or foreign, operating in Africa have withdrawn from the countries in which they work. To this sum is added a little more than two billion held by rich Africans who have been hidden in tax havens.
The country most affected by this tax evasion is Nigeria, followed by South Africa, Egypt and Angola. But even a country like Mauritius, which is still considered by some to be a tax haven, is a victim of the phenomenon with an estimated loss of 60 million dollars.
As a recently published OECD report revealed, this avoidance is not always illegal as many multinational companies, especially in the mining sector, negotiate favorable tax relations with states in exchange for their investments. This is what we modestly call tax optimization, a legal avoidance, in a way. But whether it is legal or not, this flight of capital hinders the countries.
Thus, the Global Alliance for Tax Justice estimates that in Africa it represents on average half of the states’ health budgets. In other words, in times of pandemic, African countries could hire ten million additional nurses a year if those billions earned in Africa had remained in Africa.