Across Africa, an extraordinary natural resources boom is underway. Energy and mineral extraction is driving economic growth on the continent. New exploration, new discoveries and no let-up in global demand mean Africa has a unique opportunity to deliver prosperity and opportunity for its citizens.
As you would expect from a country at the centre of the world’s mining industry, Canada is playing a major role. Eight of the countries where Canadian mining assets exceed $1-billion are in Africa. But this also places a special responsibility on Canada to ensure Africa benefits as well.
For while Africa’s economic growth at an average 5% per year for the past decade has been impressive, this success has not been translated into improvements in the lives of its citizens. African countries are not getting a fair share of the revenues from the mining activities within their borders. Weak African governance can mean the money which is paid is not used effectively to improve public services or create employment.
The result is that poverty is still widespread. Youth unemployment is rising steadily. With Africa’s population set to increase three-fold between 2000 and 2050, this is deeply worrying.
In a report released last week, the Africa Progress Panel sets out a comprehensive package of reforms for African governments, the international community and global businesses to put this right. At their heart is the urgent need to improve transparency to prevent corruption, discourage unfair behaviour and increase accountability.
Across the African continent, momentum is already building for greater transparency. More African governments are making contracts on oil and minerals publicly available. Many major mining companies have strengthened their transparency and accountability standards. Civil society is successfully pushing for greater clarity.
Many of these initiatives have been voluntary. But new legislation in the European Union and the United States makes an enormous step forward by requiring listed extractive companies to report significant payments to governments. These rules, which campaigners like me have been urging for years, will shine a cleansing light on financial relationships.
We urgently need the Canadian government to follow this lead and enact similar legislation. By doing so, it would create huge momentum for a new global standard. Canada should also join the Extractive Industries Transparency Initiative (EITI), a decision the United States and Australia have both recently taken. Canada can no longer afford to stall in these areas.
Transparency must extend to company ownership as well. Extensive use of tax havens, shell companies and multi-layered company structures operating across tax jurisdictions creates an impenetrable barrier of secrecy.
Canada must also work with other G8 governments to commit each country to full disclosure of the beneficial ownership of registered companies, with a commitment to create public registries before the 2014 G8 summit.
There is no need for caution. Transparency is good for business. It shows that companies have nothing to hide and that they recognise long-term success depends on behaving fairly and ethically. Transparency builds trust with local communities as well. It is why respected Canadian companies such as Barrick, Kinross and Pacific Rubiales already support the EITI voluntarily.
As a G8 member, Canada must also show leadership in the development of a credible and effective multilateral response to tax evasion and avoidance. Tax avoidance, including trade mispricing, has become a major concern for analysts covering Africa. Many extractive companies operating in resource-rich countries typically make extensive use of companies in offshore centres of low-tax havens to minimise the stated profit and hence their tax liability.
Canada has an enviable international reputation. But this also means a great deal is always expected of it. By taking a lead over transparency, Canada will live up to its responsibilities, help Canadian mining companies and drive Africa’s progress and prosperity. A fairer, more stable, more prosperous Africa is in all our best interests.
Published in: National Post
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Chaired by Kofi Annan, the former Secretary-General of the United Nations, the Africa Progress Panel (the Panel) includes distinguished individuals from the private and public sectors, who advocate on global issues of importance to Africa and the world.
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