Africa may have only one seat at the G20 table (South Africa), but the continent accounts for 14% of the global population.
And not only does it represent the largest untapped source of oil, gas and minerals, but also the world’s most rapidly growing consumer market. These are all rather significant statistics. It therefore came as quite a shock when Oxfam announced that Africa had lost more in tax revenue over the last 30 years than it gained in development aid.
Such an issue can only be dealt with on a global scale and such a perspective is precisely what the G20 provides. Although initially much attention was on Syria, a global tax reform seems to have been discussed at length on day 2. Various media outlets have reported that G20 leaders endorsed the idea that countries should exchange information in order to catch tax evaders.
If transparent beneficial ownership is enforced, then the use of tax havens, shell companies, and multi-layered company structures will become illegal. Properly designed and effectively implemented these global reforms will benefit Africa in particular by making available a fairer share of revenues which could have enormous consequences (such as an end to development aid). In addition, companies doing business in Africa will benefit from predictable business environments, with much clearer regulation.
Let’s hope that the implementation process will be done swiftly.