As world leaders and influential figures gather in Davos, Switzerland, for the annual World Economic Forum (WEF), a startling Oxfam report has unveiled a stark contrast in wealth distribution within Africa. According to the report, the continent’s seven richest men possess more wealth than the poorest half of Africa’s population, which amounts to over 700 million people.
The report, focusing on inequality and global power, also highlighted that seven out of the world’s ten largest corporations, many of which have a significant presence in Africa, are either led by a billionaire CEO or have a billionaire as a principal shareholder. These corporations are collectively worth an astounding $10.2 trillion, almost four times the combined Gross Domestic Product (GDP) of all African countries.
Presented in Abuja by Oxfam Nigeria’s Acting Country Director, Hamza Tijani, the report revealed that billionaires have grown $3.3 trillion richer since 2020, with their wealth expanding three times faster than the rate of inflation. Over the past three years, extreme wealth has surged, while global poverty remains stuck at pre-pandemic levels.
Furthermore, the world’s five wealthiest individuals have more than doubled their fortunes to $869 billion since 2020. In stark contrast, the world’s poorest, who constitute about 60 percent of the population (nearly five billion people), have seen a decrease in their wealth.
According to a report by The Guardian, the report warned of a widening wealth gap, predicting the emergence of the world’s first trillionaire within the next decade if current trends continue. Moreover, if these trends persist, it would take another 229 years to eradicate global poverty.
Oxfam also shed light on the dramatic rise in inequality since the COVID-19 pandemic. The report stated that the world’s richest one percent now owns 59 percent of all global financial assets, including stocks, shares, bonds, and stakes in privately held businesses.
The report suggests a progressive wealth tax on African millionaires and billionaires could generate substantial revenue. A two percent tax on net wealth above $5 million, increasing to five percent for wealth above $1 billion, could yield $11.9 billion yearly. This amount is nearly sufficient to cover the United Nations’ 2023 humanitarian requirements for eastern and southern Africa.
The report also delved into specific examples, such as Aliko Dangote, Africa’s richest person, who owns more wealth than the bottom half of Nigerians (109 million people). Dangote and Abdulsamad Rabiu, Nigeria’s second richest man, have seen their fortunes increase by 29 percent since 2020, while the bottom 99 percent have become poorer.
In December 2023, the Nigerian Investment Promotion Commission approved tax holidays for several companies, including Dangote Sino Trucks West and Lafarge Africa Plc, under the Industrial Development Income Tax Act of 2023. These tax breaks, part of the pioneer status regime designed to stimulate growth, have led to a loss of approximately five trillion Naira, representing 18.519 percent of Nigeria’s 2024 budget.
Tijani from Oxfam Nigeria pointed out that the root of poverty lies not in resource scarcity but in the monopolization of wealth by the top one percent. He stressed the government’s failure to invest in key sectors to bridge the inequality gap, leading to increased poverty and disparity.
The report calls for governments to urgently and radically reduce the gap between the super-rich and the rest of society. A dynamic and effective state is seen as the best defense against extreme corporate power. It also emphasizes the need for the Nigerian Senate to regulate the process of granting corporate tax holidays and import duty waivers to cut down on revenue loss due to corporate incentives.
Transparency in granting incentives, parliamentary oversight, and public debate on tax expenditures are essential, the report argues. It urges the government to establish a public dashboard for tax incentive data and calls for the publication of the tax expenditure report to enhance transparency and accountability in incentive management.
Reacting to the findings, Auwal Rafsanjani, Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), blamed Nigeria’s ruling political class for the widening wealth gap. He cited recent scandals in the Ministry of Humanitarian Affairs as evidence of the ruling class’s lack of commitment to closing the poverty gap.
Hamzat Lawal, Chief Executive Officer of Connected Development (CODE), described the N5 trillion loss to tax breaks as unacceptable, highlighting the urgent need for policy reforms to address the growing inequality in Nigeria and across Africa.
This Oxfam report sheds light on the deepening wealth disparity in Africa and calls for significant policy changes to address the growing economic divide.
