GRAND TAX THEFT

Civil Society’s bid to halt abuse, plunder of extractive industry

Most foreign-managed industrial mines in Africa are enclaved productive structures, which are tightly managed and whose activities are controlled internally.

In Summary

• The billion-dollar extractive industry is one of the highest revenue-earning in the world.

• In an effort to help Africa reap from its natural resources, the World Bank loaned more than Sh100 billion to low-income countries to liberalise, privatise and deregulate the extractives industry.

Workers at Kishushe mining in Taita Taveta county
Workers at Kishushe mining in Taita Taveta county
Image: FILE:

For a long time, the African mining sector was perceived to be an enclaved economy that extracted natural resources to the benefit of the global economy while offering little to advance social and economic development on the continent.

On the contrary, recent mining industry restructuring has fuelled fresh hopes that the sector carries the potential to drive industrialisation in Africa.

On the Global Day of Action that is marked in November yearly, the civil society clearly demonstrated why the extractives industry must be reclaimed from the hands of a few, wealthy and foreign multinational corporations to benefit the communities in Africa.

Speaking in one voice, the civil society successful organised and executed an online campaign themed ‘Campaigning on Tax Justice and Extractives; Our proposed calls and demands’.

Among the demands was to encourage the public to expose tax abuses of corporations engaged in extractive activities. It also sought to build and shape strong public opinion towards seeking tax and fiscal justice for tax abuses in mining and other extractive activities.

The billion-dollar extractive industry is one of the highest revenue-earning in the world. In an effort to help Africa reap from its natural resources, the World Bank for close to four decades, loaned more than Sh100 billion to low-income countries to liberalise, privatise and deregulate the extractives industry.

Incidentally, this resulted in the en masse arrival of multinational corporations to lead a foreign-controlled extractives economy across the continent.

Most foreign-managed industrial mines in Africa are enclaved productive structures, which are tightly managed and whose activities are controlled internally. The communities hardly know the contents of their operational contracts and processes employed in mining. The effect of their investors’ activities may not be felt immediately but the implications are long-term and, in some cases, irreversible.

While addressing students from the Technical University of Kenya, School of Business and Management Studies, Fred Njehu, a senior policy adviser at Greenpeace Africa cited coal mining in Kenya and how the community stopped the construction of a mining plant in Kitui.

The locals voiced their opposition to the project through a strong-worded petition to the National Assembly Energy Committee citing irrevocably damaging effects not only on their health but also the environment as well. They termed coal as ‘dirty energy’ with irreversible health and environmental side effects. “Speak out, do not watch as an entire community’s lives are being damaged” he urged the youth.

A year ago, the top 40 mining companies earned $683 billion of revenues from extractives. Besides the host countries earning little and losing their natural endowments, they also lost billions of dollars from abusive tax practices. The mining MNCs avoid paying their fair share of taxes and shift their profits in the tax havens and financial secrecy jurisdictions.

The aim of the deliberations is to unmask the extractive companies’ grand theft of taxes and demand for tax justice. The ultimate goal is to secure mineral-rich countries from abuse and plunder by MNCs and let the communities benefit from natural resources.

The writer  works for Tax Justice Network Africa