A human economy anchored on good governance, sound business polices and technology is key to tackling inequalities in society and ensuring sustainable development, the Oxfam International executive director, Winnie Byanyima, has said.
Byanyima, who is in Rwanda to attend the World Economic Forum on Africa, made the observation during a public lecture at the University of Rwanda’s College of Business and Economics in Kigali on Tuesday.
She urged political leaders across the continent to nurture a human economy that works for all its peoples other than one that serves a few, and to engage all the young people.
The gap between the rich and the poor is larger in Africa than anywhere else in the world apart from Latin America because little is being done to reduce poverty in Africa, she said.
“Inequalities are harming the ability of growth to reduce poverty. The growth rates in Africa are not doing enough to reduce poverty. This kind of inequality is preventing the emergence of a new middle-class and creating a situation where we have a few at the top and millions trapped in poverty and nothing in between,” she said.
She said that with Africa’s steady economic growth, tackling inequality was important, by finding radical solutions and engaging the young people.
“While the situation in Africa is slowly changing global demand has slowed and commodity prices have fallen, which are the source of income. Tackling inequality is important at this time when growth is slowing. We need to find drivers that engage all our young people,” she said.
“Human economy needs big ideas and oddness. Our vision for growth and development in Africa must include finding radical solutions to tackle this inequality and this short-sightedness that squanders our greatest asset – the brains.”
The Oxfam chief insisted that political leaders need to nurture a human economy and to protect other things that are just as important to GDP-growth.
Accountable, democratic government is the most powerful equalising humanity, she added.
“The extreme and wider inequality is as a result of economic and political choices...Governments must be bold in realising and standing up to the elites and businesspeople and use all the tools to ensure that there is a human economy benefiting everybody, they can be tools of taxation or public spending to social economic impurities.”
African countries have raised their tax GDP ratio from around 18 per cent to 21 per cent in recent years.
Byanyima observed that this increased revenue can do a lot but African governments must ensure that, as they are raising revenue, they should do it in a way that decreases rather than increases inequality.
Unfortunately, she said, tax systems in Africa are some of the most regressive in the world, in the sense that they tax the richer more than the poor.
She noted the need for businesses to thrive in a human economy, and think about new models that show as much concern for workers, their customers and the communities within which they exist as they do for their shareholders and executive boards.
“A responsible business must have a central role to play in our economy for the future of our development. We need private companies where workers have a more controlling interest.”
According to a report by Global Financial Integrity, developing and emerging economies lost $7.8 trillion in illicit financial flows from 2004 through 2013, with illicit outflows increasing at an average rate of 6.5 per cent per year—nearly twice as fast as global GDP.
“Governments are supporting public private partnerships that are likely to turn the benefits of their investments towards the privileged and their shareholders while the vulnerable get the least from them. It is the responsibility of the governments to ensure that foreign and domestic investors don’t cheat young entrepreneurs. They most empower all kinds of people,” Byanyima said.