By Sipho Mthathi
PRETORIA, Oct 11 2015 (IPS)

Climate change is changing the world we know and love. Our land, homes and food are at risk. With nearly a billion people already living in poverty, it is also the single biggest threat to the fight against hunger.

Sipho Mthathi

As world leaders gather in Paris this December to hammer out a climate deal at the Conference of the Parties (COP21), those representing Africa need to take a bold stance.

Pastoral and indigenous communities across Africa are highly vulnerable to changes in climate. In December, Africa needs to stand together and negotiate for more funding for adaptation that will be adequate, predictable and much greater than what has been forthcoming up until now.

Tough times

Across the continent of Africa, we are already seeing threats to our food supply due to less reliable rainfall patterns, rising temperatures and a greater number of extreme weather events. Millions of Africans are already living with extreme poverty and our future as a continent depends on their survival.

One such person is Mary Matupi, a farmer from the Rumphi district of northern Malawi. Matupi grows maize on a small piece of land, with a normal harvest yielding almost 80 bags weighing 50 kg each. However, in the last growing season she managed to produce only 15 bags due to a delay in the rains. Matupi told us that “if we don’t act to stop climate change, harder times are still to come and we will suffer.”

Women like Matupi are the majority of smallholder producers across Africa – they are the face of 60 to 80 per cent of food production labour across sub-Saharan Africa. Erratic rainfall substantially impairs their capacity to provide for their families and their communities. Like millions of others, Matupi is simply trying to feed her family, her community and, ultimately, her country.

Climate Change Impact

Many places in Africa could experience even greater warming than the global average – a 4C warmer world could potentially be 6C warmer in some African countries. According to the United Nations’ climate agency, the UN Environmental Programme (UNEP), changes in water availability and temperature will have a huge effect on African agriculture (where 97 per cent of production is rainfed and 60 per cent of the continental labour force works in this sector). With sea levels rising, many African low-lying countries are at risk of losing their farmland. The financial losses could be especially great in the coastal areas of Mozambique, Senegal and Morocco.

According to the United Nations Framework Convention on Climate Change (UNFCCC), if global warming exceeds 3C globally, maize, millet and sorghum cropping areas will be unviable across much of Africa. We can also expect more frequent and more severe extreme weather events, with huge social and economic costs. Extreme weather conditions will also affect our diets, and likely result in more undernutrition and disease – a fact which governments cannot ignore. Therefore financing for technology (i.e. new drought-resistant crops, new farming techniques, early warning systems, seed storage protection programs, etc.), which could help African farmers cope, needs to be top of the agenda in Paris.

One example of how technology and new methods have assisted farmers is the story of Kabugho Ruth from Uganda. Ruth says that adopting new methods of farming has already ‘done wonders for her’. By constructing terraces in her coffee/banana garden, Ruth was able to triple her production. Imagine what financing can do for other small-scale farmers across the continent.

Citizens are Taking Action

African farmers are demonstrating both their resilience and commitment to climate action and they deserve our support.

They are not alone. Across the continent the Africa People’s Petition is aiming to collect one million signatures ahead of COP21 to demonstrate African support to prioritize climate change. Across the continent, organizations are mobilizing on World Food Day this 16 October as part of the Women Food Climate campaign, which highlights the role of women small scale producers in meeting food needs in Africa and their struggle against the impacts of climate change.

Farmers like Matupi and Ruth need their governments to play their part by fighting for funds that can help mitigate the impact of climate change.

Conservative estimates predict that Africa will need approximately US$95 billion a year by 2050.

African leaders must avoid the same path of profit-led, destructive high-carbon development – formerly pursued by rich countries – which brought us to the current crisis.

To achieve this we need visionary leaders who will go to the Paris negotiations calling for a global shift to renewable energy use. And they should be unrelenting in claiming the climate financing and technology that we need.

Small-scale farming provides most of the food produced in Africa, as well as employment for 70 per cent of working people. On this World Food Day, we cannot allow our small scale farmers to be forgotten in Paris. A significant climate adaptation financing deal in Paris could change the lives of farmers like Mary Matupi and Kabugho Ruth forever and ensure the continent is able to feed itself.

We cannot ignore this opportunity.

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By Sipho Mthathi
JOHANNESBURG, Jun 12 2015 (IPS)

Africa is known as the ‘paradox of plenty’. How can a continent so rich in natural resources be so poor?

Economic growth is predicted to increase by 4.5 percent across the continent this year, despite falling oil prices and the Ebola crisis. South Africa’s economy, the second biggest in Africa is expected to continue to grow by 3.5 percent this year; Nigeria will grow by an enviable 5.5 percent.

Sipho Mthathi, Executive Director of Oxfam South Africa

However, millions across Africa are struggling.  Economic inequality is on the rise, and public coffers are insufficient due to an increasing demand for public services like health, education and housing.

Recently, Thomas Pogge and other distinguished academics have written about the cost of progress. Surprisingly, history provides us with examples of countries where, if there is a balance between economic growth and public spending, it is possible to address inequality.

There is no time to waste in looking for ways to address this widening gap across Africa.

It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging.

In January, the report of the High Level Panel on Illicit Financial Flows (IFFs) from Africa, chaired by former South African President Thabo Mbeki, contended that IFFs from Africa increased from about 20 billion dollars in 2001 to 60 billion in 2010 in the merchandise sector alone.

According to Global Financial Integrity’s 2014 report on IFFs from developing countries, South Africa alone may have lost more than 122 billion dollars between 2003 and 2012 in IFFs.

This is a lost opportunity for money that could have been reinvested in advancing Africa’s development and increased access to public goods for her Africa’s people.“It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging”

But this is only the half of the story. Multinational companies are gaining at the expense of African people through other ‘legal’ forms of corporate tax dodging, and through negotiated tax breaks. This is happening because of a lack of fair global tax rules, and behind-closed-door deals between corporations and governments, rushing to seal deals under pressure.

Africa’s astounding growth is affecting human development. And these losses in tax revenue come at a time when the role of official development assistance to Africa is declining.

Fair and progressive tax systems should be providing financing for well-functioning government programmes to enable governments to uphold citizens’ rights to basic services (such as healthcare and education), and cement trust between citizens and governments.

Establishing an effective tax system is critical if Africa is going to mobilise the resources it needs to tackle poverty and inequality.  Africa is home to six out of ten of the world’s most unequal countries – South Africa, Lesotho, Namibia, Botswana, Zambia, and Central Africa Republic.  Some estimates on Africa’s financing needs include 40-$60 billion dollars per year to finance the post-2015 development agenda.

This is not just Africa’s problem. Around the world, many lower-income countries have been subject to harmful tax practices, including transfer pricing, whereby a transfer price may be manipulated to shift profits from one jurisdiction to another, usually from a higher-tax to a lower-tax jurisdiction.

After revelations of how multinational enterprises (MNEs) such as Starbucks, Google and Apple deliberately structured themselves to minimise their tax bills, the Organisation for Economic Cooperation and Development (OECD) launched an effort to reform this base erosion and profit shifting (BEPS) practice. This reform is expected to wind up by the end of 2015.

However, since the launch of the BEPS Action Plan, developed countries have not had a real voice or influence in the process.  Just four African countries, including South Africa as a G20 member country, have been invited to participate as observers.  These countries are bringing attention to the many mining corporations which are offered lucrative tax incentives which must be addressed in the BEPS plan.

The African Tax Administration Forum (ATAF) is a regional tax body that has been invited by the OECD/G20 to participate in the BEPS reform process.  This should provide further scope to influence the BEPS process with an African perspective.

At the same time, the South Africa Revenue Services (SARS) is going after billions lost through wasteful incentives and trade mispricing. SARS has recovered 5.8 billion rand (460 million dollars) over the three-year period 2011-2014, 55 percent (3.4 billion rand or 274 million dollars) of which is attributed to the mining industry.

South Africa’s membership in the G20 (and its role as co-Chair of the G20 Development Working Group) provides an enormous opportunity to insist on broad inclusion of all nations in the BEPS reform process.

At a recent conference convened by ATAF, South African Finance Minister Nhlanhla Nene called for “Africa to protect its own tax base, and advance domestic resource mobilisation through a common voice, a common concern and a common action plan.”

It is time that all African finance ministers wake up to the possibility that tax revenues for financing essential services for their citizens, or investment in small-holder agriculture or infrastructure, could come from the recovery of billions of dollars lost from corporate tax dodging and unfair tax competition.

Tax breaks provided to six large foreign mining companies in Sierra Leone, for example, are equivalent to 59 percent of the total budget of the country – or eight times the country’s health budget.

It is time for a global inter-governmental body on international tax cooperation to allow for a more inclusive and coordinated approach to ongoing tax reform, beyond BEPS.

All countries should be able to participate in tax negotiations on an equal footing, which guarantees one country, one vote, and where representatives will have the political mandate to speak on behalf of their governments.  Simply relying on the BEPS process to re-write tax rules will not be enough to end international tax dodging.

Through the BEPS reform process and this new tax body, there would be real potential for an African taxation renaissance.

Edited by Phil Harris

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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