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Tax Evasion in Sub-Saharan Africa

tax evasion in sub-Saharan Africa

Tax evasion, while a global issue, particularly hinders sub-Saharan Africa economic growth. In fact, the total amount of lost taxes exceeds the amount of foreign aid sent to the region. Tax evasion in Sub-Saharan Africa deprives governments of the ability to provide vital services, such as healthcare, education and disaster relief, to the 413 million people living below the poverty line.

By the Numbers

The Organization for Economic Cooperation and Development (OECD) estimates that Africa loses $50 billion to tax evasion annually. Some place the figure much higher; for example, the United Nations Economic Commission for Africa (UNECA) estimates that $100 billion is lost.  Compared with the total amount of foreign aid sent in 2017, $43.5 billion, the region experiences a net loss of approximately $6.5 billion, while using the more conservative OECD estimate.

The United Nations Conference on Trade and Development (UNCTAD) found that a wide financing gap exists in Africa. A financing gap refers to the difference between the amount needed to achieve Sustainable Development Growth (SDG) and actual government revenue. The UNCTAD estimates that there is a financing gap of $210 billion for key government initiatives, including infrastructure, food security, healthcare and education.

Resource Extraction Drives Tax Evasion in Sub-Saharan Africa

Multinational companies involved in resource extraction are particularly effective at paying only a small share of the taxes that they owe. Mineral and oil extraction companies are responsible for much of the tax evasion in Sub-Saharan Africa, accounting for total annual losses of up to 6 percent of African GDP. The Southern African Catholics Bishops Conference recently wrote a letter to 21 mining companies operating in South Africa; they asked each to explain their use of tax havens, the purpose of their subsidiaries, and if tax evasion was consistent with their corporate social responsibility policies.

The OECD launched the Africa Initiative Report in 2014, which includes 29 of the 46 countries in sub-Saharan Africa, as a means to combat tax evasion. The OECD hopes to increase cooperation between member countries, which will provide greater transparency. The progress being made is incremental, but most member countries are meeting the requirements set out by the OECD. The first and among the most important steps is for African countries to develop Exchange of Information (EOI) systems. EOIs allow for member countries to request relevant profit and tax information from one another. The 29 countries had a total of 23 people on EOI staff in 2014; in 2018, that number has grown to 79 staff members, prompting the OECD to describe the situation as “greatly improved.”

Tax Justice Network Africa

Tax Justice Network Africa (TJNA) is a research and advocacy organization working to promote “equitable, inclusive and sustainable development”. They point to tax evasion in Sub-Saharan Africa as a major cause of revenue loss. To stymie tax loss, TJNA calls for a more transparent global financial network; tax havens, or countries with very low effective tax rates, present an obstacle to achieve this goal. However, TJNA hopes to establish an Intergovernmental Tax Commission (ITC) in the United Nations in order to set international tax standards. The ITC, according to TJNA, would allow for greater conformity and make it more difficult for businesses to evade taxation.

A Broad Coalition

Tax evasion in Sub-Saharan Africa is a major cause of concern. However, international organizations and African countries are partnering to tackle it. If successful, Africa can expect to reap an additional $50-100 billion in annual tax revenue. While the 413 million people living in poverty will benefit significantly from higher rates of tax compliance, business can expect to benefit as well. As African economies continue to develop, businesses will have more opportunity for investment in emerging markets. Capital currently flows out of African economies. If the trend is reversed, governments, citizens and businesses will all benefit.

– Kyle Linder
Photo: Flickr

Visa Helps Advance Consumerism in Sub-Saharan Africa

Advance Consumerism in sub-Saharan Africa

As a way to build a more “digitally exclusive ecosystem,” Visa is partnering with Branch International to advance consumerism in sub-Saharan Africa. So the Branch-Visa partnership offers over 2 million consumers in sub-Saharan Africa virtual, prepaid Visa debit cards. With these virtual Visa accounts, consumers can then create accounts on Branch, the most downloaded finance app in Africa. Now, with access and finance, citizens are even able to invest in technology. As a result, this donation will advance consumerism in sub-Saharan Africa, even enabling consumers to start their own tech companies.

Here’s how and why Sub-Saharan Africa needs this.

Sub-Saharan Africa Can Participate in Global Consumerism

Giving citizens in sub-Saharan Africa access to online purchasing allows them to contribute to global markets. Many setbacks prevent citizens of impoverished African countries from entering this market. These setbacks include:

  • Lack of transportation
  • Limited stores selling modern, technological products
  • Having only cash to buy products
  • Having low or no credit score

Enabling these citizens to start their own tech companies will advance consumerism in sub-Saharan Africa, as products become accessible and affordable.

Most of Sub-Saharan Africa is Unbanked

According to Business Insider, only about 30 percent of sub-Saharan African adults had a bank account as of 2014. This percentage drops to below seven in Niger, Guinea and the Central African Republic. About 42 percent of citizens in these countries cite lack of money as the reason for not having an account.

But with prepaid debits cards, over 2 million citizens in Sub-Saharan Africa can now access online banking. Additionally, the region is also expanding its internet access, to even the most remote parts of Kenya and Tanzania. Ultimately, these efforts will advance consumerism in sub-Saharan Africa, as online banking becomes accessible to more citizens.

Merchants Can Grow Their Businesses

Currently, most small businesses and startups in sub-Saharan Africa are unable to access quick loans. However, the Visa-Branch partnership also includes preferential small business loans to Visa merchants. So as small businesses and startups grow, citizens will have greater access to tech companies across the region.

Because most sub-Saharan African citizens do not possess bank accounts, they rely on cash and only invest in local businesses. But this partnership with Visa and Branch International allows these citizens to use online banking and expand their reach. In doing so, they not only help grow businesses across the region but advance consumerism in sub-Saharan Africa.

– Sara Devoe
Photo: Flickr

Sack Farming in Kenya Is Tackling Food Insecurity

Sack Farming in KenyaAs of 2015, 153 million African citizens reported being impacted by food insecurity. Food insecurity is defined as a state of living where one is unable or has limited access to obtain consistent, nutritionally valued food to maintain a healthy lifestyle.

Current Issues in Africa

The average per capita income of sub-Saharan African is approximately three times lower than that of the rest of the world. One of the main sources of income in Africa is agriculture which can easily be impacted by the quality of soil, a stable water source, temperature and use of fertilizer.

That being said, in areas such as Kenya, 42 percent of the population (44 million people) live below the poverty line. Agriculture is one of the top sources of income and a major boon to the nation’s economy. In fact, it gives work to 70 percent of the workforce and contributes to 25 percent of Kenya’s annual gross domestic product.

Kibera, Nairobi, one of Kenya’s largest slums, suffers from a lack of resources such as water, land space and labor. With a consistent rising population (4.1 percent annually in Nairobi), more food is needed to sustain life. An upcoming technique to combat this problem, being implemented not only in Kenya but in surrounding nations such as Uganda, is sack farming.

Combating Food Scarcity with Sack Farming

Sack farming is the process of utilizing ordinary scrap sacks as the foundation for producing crops such as potatoes, carrots and spinach. By implementing sack farming in Kenya, food insecurity throughout the country can be tackled. All that is needed for this form of planting is the sack, manure, soil, small stones for drainage and the desired seeds.

Beginning with the necessary equipment, sacks of any size and texture can be used, from burlap encasings to plastic bags. Fertilizer can be made from composted food and waste. As for labor, the younger communities in Kenya have stepped up to take responsibility.

Effects of Sack Farming in Kenya

Depending on the size of the sacks, one sack has the ability to grow up to 45 seedlings. In terms of income, if a household is able to afford three sacks with 30 seedlings each, the production would be substantial. This would increase the household’s income, therefore increasing the ability to purchase other products ranging from electricity to eggs and milk.

Sack farming in Kenya has the ability to produce crops such as spinach, lettuce, beets, arugula, potatoes, carrots and onions. Not only does this impact the economy, but families will finally be able to have access to a stable food source. This means fewer chances of developing nutritional deficiencies, especially in younger children.

Sack farming in Kenya is a more convenient and realistic way of feeding one’s family and community, especially when living in a rural or slum area. The process is an inexpensive, simple way to produce nutritious foods, combating the issue of food insecurity in areas throughout Africa.

– Jessica Ramtahal
Photo: Flickr

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The Life-Changing Impact of Solar-Powered Appliances

solar-powered appliances
Electricity is difficult to come by in sub-Saharan Africa, India and other places in the world. In 2016, an estimated 588 million people in sub-Saharan Africa and 239 million people in India were without electricity. Slowly, more people are gaining access to electricity, specifically through solar-powered appliances and lighting.

Current Issues with Electricity

A lot of the rural cities or areas do not have electricity because they are not nearby to an electricity grid. People in Tanzania, like Lusela Murandika, power TV sets with diesel generators and other parts of their homes with charcoal, wood and other biomass.

Using resources like coal, charcoal, dung or wood as a source of electricity pollutes the breathable air that is needed to survive. According to the World Health Organization, 3.8 million people a year die from illnesses that are tied to air pollution.

Kerosene used in lamps is also a dangerous product to use. It produces soot and toxic smoke that “damages lungs and causes other serious health problems,” according to National Geographic. The use of kerosene lamps, especially ones that are homemade, are dangerous because thousands of children and adults die or are burned from them.

How Solar-Powered Appliances Are Changing Things

Technological advancements have made it easy for solar-powered appliances to become more readily available to purchase. Something as simple as a solar bottle light bulb runs around $2-3.

The solar bottle light bulb is “made out of a plastic bottle of purified water and bleach, [that] is sealed into the roof,” according to National Geographic. The water allows for light to be spread out in the room and the chlorine keeps mold from growing. The solar bottle light bulb not only works with the sunlight but it also works when the moonlight is strong as well. It allows for the people in the home to be able to do more within the household, like study, read or work inside.

Connecting people that live in rural areas to an electrical grid sometimes is not possible or it becomes too expensive to be able to afford. Electricity then becomes a luxury that people cannot afford. Sometimes, people wait years for a grid to be built near them, but having solar-powered appliances allows for them to have access to that technology much sooner.

Organizations Assisting the Distribution of Solar Power

In 2016, four U.S. foundations announced an initiative “to support efforts to bring reliable ‘off-grid’ or ‘mini-grid’ power—fueled by solar energy—to people in India who now are without it,” according to Think Progress. The foundations include Hewlett, the David and Lucille Packard Foundation, the Jeremy & Hannelore Grantham Environmental Trust and the John D. and Catherine T. MacArthur Foundation. All four foundations have initiated a $30,000,000 initiative to fund the program and the Indian government is set to match this.

Furthermore, a company by the name of Easy Solar is helping provide electricity to the residents of Sierra Leone. This company is lead by Nthabiseng Mosia, Alexandre Toure and Eric Silverman. Easy Solar began in 2015 as a response to energy accessibility in Sierra Leone. In an interview from Business Report with Nthabiseng Mosia, she stated, “It’s often widely publicized that two-thirds of sub-Saharan Africans lack access to electricity. But in Sierra Leone, 90 percent of people (and 99 percent in rural areas) don’t have any electricity.”

With Easy Solar, appliances are set up so that consumers are on a rent-to-own basis, providing weekly payments. Some of the devices that the business offers are lights and mobile chargers as well as solar lanterns that have the capability of charging phones and offer more than 24 hours of light. The company’s appliances are not just limited to households but are also for businesses as well.

There are many organizations on the ground that are helping individuals obtain the necessary materials to be able to survive that will not cost them their lives. Solar-powered appliances are one solution that is helping eradicate poverty.

– Valeria Flores
Photo: Flickr

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Humanitarian Aid to Somalia

Humanitarian Aid to SomaliaSomalia is experiencing the country’s worst drought in 40 years which has led to a severe famine in the worst affected areas. The drought coupled with a ban on humanitarian assistance by Islamist group Al-Shabab has caused Somalia to be left in quickly deteriorating circumstances. Instances of violence, food shortages and the spread of many drought-related diseases have negatively affected the country and caused many people to be internally displaced.

The Office of the U.N. High Commissioner for Refugees (UNHCR) reported 975,000 displacements in Somalia with 82 percent, or 804,000 displacements, related to drought and its effects. The rest of the displacements are caused by conflicts and insecurities threatening the country.

According to the Food Security and Nutrition Analysis Unit (FSNAU), the estimated number of people in need of humanitarian aid in Somalia has decreased from 6.7 million people to 6.2 million, which shows that the situation is improving. However, localized famine, daily violent attacks and the ongoing ban set in place by Al-Shabaab, which if broken leads to brutal punishments, make it hard for aid workers to provide assistance to people still in need. 

Aid workers have been highly targeted by Al-Shabaab and many of them are victims of abductions by armed militants. Al-Shabaab imposed the ban on humanitarian aid in Somalia in July 2017. The ban mostly covers areas under his control and has forced hundreds of thousands of people to choose between death from starvation or violent punishment. Communities were told by the militant group that they would experience extreme punishment if they called or had any contact with humanitarian agencies.

Even though aid officials and international human rights organizations have provided humanitarian aid to Somalia and saved many lives, conditions within the country are still deteriorating, with almost half of the population facing starvation if no help is received in the coming months.

After the deadly truck attack on October 14, Somalia needs help more than ever. USAID’s Office of U.S. Foreign Disaster Assistance responded to the attack by providing $100,000 to a partner organization so that emergency medical supplies could be delivered to the 300 victims of the attack.

– Sarah Soutoul

Photo: Flickr

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US President’s Malaria Initiative Adds Four New Countries

U.S. President's Malaria Initiative Expands to Include Four New CountriesOn September 21, the United States Agency for International Development (USAID) announced that its President’s Malaria Initiative would expand to include four new countries: Cameroon, Cote d’Ivoire, Niger and Sierra Leone.

The President’s Malaria Initiative, which was initially launched in 2005 by USAID, works diligently to decrease the incidence of malaria-related deaths and increase malaria prevention and treatment programs predominately in Sub-Saharan Africa. With the addition of the newly developed programs, the initiative currently works in 24 different countries in Sub-Saharan Africa.

According to USAID, the initiative’s expansion will help approximately 332 million people in order to fight the spread of malaria.

The Center for Disease Control reported in 2015 that the initiative works with other agencies such as the World Bank, UNICEF and non-governmental organizations in order to combat malaria more efficiently.

The initiative is dedicated to providing malaria prevention programs to those at the greatest risk for suffering from malaria-related deaths such as pregnant women and young children. Such interventions include “intermittent preventive treatment for pregnant women” and “indoor residual spraying with an approved insecticide.”

Also, the initiative works closely with the Sub-Saharan African countries in order to address other factors that increase one’s risk of contracting malaria. For instance, the initiative helps with reinforcing infrastructure in developing countries; political instability is oftentimes linked to negative health outcomes.

USAID reported in 2016 that more than six million lives have been saved through the initiative; however, the initiative still has a vast amount of work to do. Malaria spreads quickly in Sub-Saharan African countries, and there is a large number of susceptible pregnant women and children in such countries that need immediate care. The inclusion of four new countries is promising, but President Donald Trump’s fiscal year 2018 budget seems to tell a different story.

The Council on Foreign Relations stated in April 2017 that President Trump’s fiscal year 2018 budget “calls for deep cuts to foreign assistance programs,” which is immensely troublesome.

Programs like the President’s Malaria Initiative are able to thrive and help more people with necessary funds, so it is imperative that the United States government stays on track to further developing this initiative.

– Emily Santora

Photo: Flickr

Digital AIDS Prevention in Africa

AIDS Prevention in AfricaDespite its relatively low prevalence in the U.S., AIDS continues to be a seemingly uncontrollable global epidemic. But nowhere else on earth suffers as much from this tragic disease as Sub-Saharan Africa, where 69 percent of all those infected reside. Although poor sanitation, lack of preventative treatments and education are doubtlessly responsible, the inaccessibility of healthcare technologies also substantially inhibit AIDS prevention in Africa.

Many people in developing countries lack access to even the most basic of healthcare technologies. Access to these innovations are hindered by a variety of complex obstacles. Sometimes the treatments exist, although it is often impossible for the average person to afford them. Other times, however, the healthcare infrastructures are so poor that they are unable to support the life-saving technologies that wealthier countries can enjoy. The festering epidemic has caused the U.S. to make AIDS prevention in Africa a priority for U.S. foreign policy. This led to the creation of the President’s Emergency Plan for AIDS Relief (PEPFAR).

Since its inception in 2003, PEPFAR has received strong bipartisan support for its leadership in the containment of the HIV/AIDS crisis. It currently provides 11.5 million patients with antiretroviral treatment. This number is up from the mere 50,000 individuals receiving treatment before PEPFAR was established.

These numbers confirm the success of the program’s strategy. Through a new partnership with the financial leader Mastercard, however, PEPFAR plans on elevating its approach to AIDS prevention. The private-public partnership will introduce digital technologies and data analytics to improve access prevention and treatment plans. Research conducted by PEPFAR shows that the greatest cost in HIV/AIDS treatment is in treatment delivery rather than the cost of drugs. Through its partnership with Mastercard, the organization hopes to improve efficiency of its efforts.

Mastercard has a history of developing digital solutions for impoverished regions through its Foundation Fund for Rural Prosperity (FRP). Since its formation in 2015, FRP has financed 19 projects across Sub-Saharan Africa that widen the economic inclusion of poor people living in rural areas. This unique charitable expertise makes Mastercard the perfect partner for PEPFAR in the endeavor to promote AIDS prevention in Africa.

Bringing healthcare technology to rural, impoverished communities may be the single most powerful step toward combating deadly diseases. Healthcare in developing countries is impeded by many obstacles such as a lack of formal training, research tools and funding. As a result, medical technology is only as useful as those implementing it are resourceful. With the partnership of two global leaders in health and innovation, PEPFAR and Mastercard promise to bring AIDS containment to regions that are suffering most.

– Micaela Fischer

Photo: Flickr

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Insecticide-Treated Bed Nets Key in Fight Against Malaria

Insecticide-Treated Bed NetsDespite the overall decrease in malaria deaths, which comes in at a solid 29 percent drop from 2010 to 2016, the reality is that the fight against malaria is still an ongoing battle with massive casualties. Some 429,000 malaria deaths occurred in 2015 alone. In fact, over half of the world’s population is still at risk of malarial contraction, and those living in sub-Saharan Africa are particularly vulnerable due to the area’s malarial-conducive environment. The risk of contraction in this particular region can be greatly mitigated through the use of a simple tool: insecticide-treated bed nets (ITN). The product has revolutionized the fight against malaria and ultimately become the cornerstone of malaria prevention in sub-Saharan Africa.

In a study conducted in the three northern regions of Ghana in 2015, it was found that the mortality rate for children under five that slept beneath ITNs was 18.8 percent lower than those that did not sleep beneath an insecticide-treated bed net. Furthermore, the majority of gathered research shows a significant correlation between widespread ITN usage and decreased malarial death levels. This is attributed to the fact that insecticide-treated bed nets prevent the spread of malaria by not only physically inhibiting mosquitoes from infecting individuals, but also by killing those mosquitoes which encounter the net. This is significant, as it reduces the population of malarial transmitters.

The fact that insecticide-treated bed nets actually kill, and consequently decrease, potential malaria transmitters is exactly why insecticide-treated nets are so essential in the campaign against malaria. Yet, most ITNs require that the nets be periodically retreated with insecticides every three to six months. Such repeated treatments are both expensive and time-consuming, a combination which means that most re-treatments are never done. This ultimately means that ITNs are no better than the average bed net. The identification of this weakness led to the birth of the long-lasting insecticide net (LLIN).

The LLIN was a product that was created in 2003, in a Tanzanian textile factory called A to Z Textiles. After gaining support from Acumen Fund, an internationally-renowned venture-capital organization, A to Z was able to collaborate with Sumitomo Chemical and ExxonMobil to begin producing chemically-treated bed nets that are effective for up to 5 years. This is a huge shift from the previous technologies that required repeated treatments.

By injecting the nets with long-lasting insecticide, A to Z ignited its collaboration with the World Health Organization and UNICEF in an effort to distribute the nets to the most vulnerable individuals. Today, the factory employs over 7,000 people, most of whom are women, and is the largest producer of LLINs in Africa, with a total production of over 29 million bed nets a year. It maintains a commitment to accessibility and has engineered a way to reduce production costs to only five dollars in order to make the nets more financially accessible to those who need it the most.

Though the battle against malaria in sub-Saharan Africa is ongoing, it is greatly aided by the increased usage of ITNs, and LLINs specifically. As long as organizations like A to Z continue to innovate new and accessible methods of prevention, there can be hope for a malaria-free world.

– Kailee Nardi

Photo: Flickr

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Solar Energy Offers Solution to Poverty in Sub-Saharan Africa


Approximately 600 million people in sub-Saharan Africa, or two-thirds of the population, are living without access to proper electricity. However, there is a possible solution. Solar energy has the power to reach rural areas and costs less than fuels like diesel or kerosene. African families could potentially cut their spending on electricity from nine percent of household income to two percent by replacing kerosene with solar energy. Zambia is taking the first steps in making the switch to solar power and eradicating poverty in sub-Saharan Africa.

Nkandu Luo, the higher education minister of Zambia, wants to provide clean and renewable power to rural communities to lift people out of poverty. Off-grid solar power helps improve and enhance education through access to computers and the internet.

The clean energy movement is called the Lundazi Green Village project, after the first village that will benefit from the new energy source. Egichikeni primary school in the Lundazi Green Village is the intended site for phase one of the program.

In addition to improving education, the project will improve safety, healthcare and agriculture in rural communities. This will facilitate people in escaping poverty in sub-Saharan Africa. Parts of the Lundazi Green Village project include new security technology, street lighting, medical equipment and irrigation methods.

Luo’s long-term goal is sustainability. The use of solar energy addresses the specific needs of rural communities and grants them financial independence. About 300 households plus public buildings like schools and hospitals will benefit from the project. New access to electricity makes job creation and higher incomes inevitable.

Another plus? Access to solar power in sub-Saharan Africa tackles climate change. It also connects people to the global network, allowing them to increase their economic prospects.

Zambians are not the only ones attempting to solve poverty in sub-Saharan Africa. Azuri Technologies, a global organization, has introduced ‘entry-level solar systems’ that give people eight hours of electricity each day. Customers pay an initial installation fee and then pay weekly or monthly through pay cards or with their phones.

Access to power encourages people to buy and use more technology, especially resources that connect them to the rest of the world via the internet. The pay-as-you-go format is successful because it allows people without bank accounts to use their phones to operate their finances.

Upfront costs of solar energy are high compared to fuels like kerosene or diesel, so some are hesitant to make the switch. However, the cost of installing off-grid power is expected to decrease by 60 percent in the next 20 years and has already fallen in cost by about 80 percent since 2010. Renewable energy could be the solution to ending poverty in sub-Saharan Africa and millions of communities around the world.

– Rachel Cooper

Photo: Flickr

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Toy Inspires Low-Cost Lab Aid to Detect Malaria

Toy Inspires Low-Cost Lab Aid to Detect Malaria
Malaria is a life-threatening disease caused by parasites that are transmitted through the bite of an infected mosquito. In 2015 alone, there were 212 million cases of malaria and 429 thousand deaths. Suffice it to say that malaria is a global health problem.

Even worse is that Sub-Saharan Africa continues to carry a disproportionately high share of the global malaria burden. In 2015, the region was home to 90 percent of malaria cases and 92 percent of malaria deaths.

The good thing is that malaria is preventable and curable, given the proper tools to do so. A device called a centrifuge that spins a blood sample very quickly and separates different cells can detect malaria. Centrifuges, though, are expensive, bulky and require electricity – which makes it inefficient in regions such as Sub-Saharan Africa.

A low-cost lab aid to detect malaria is in dire demand, which is exactly what Manu Prakash, a professor of bioengineering at Stanford University, realized on a trip to Uganda. On his trip, Prakash says he found centrifuges used as doorstops because there was no electricity.

Back in California, Prakash experimented with spinning toys in his search for a model for a low-cost lab aid to detect malaria. Though toys are not the conventional approach to developing a lab aid, Prakesh argues that toys hide profound physical phenomena we take for granted.

After experimenting with several spinning toys, including a yo-yo, they stumbled upon the children’s toy known as the whirligig or buzzer. The toy is made of a disk that spins when the strings that go through it are pulled.

This new low-cost lab aid to detect malaria dubbed the paperfuse, can separate pure plasma from whole blood in less than 1.5 minutes, and isolate malaria parasites in 15 minutes. The paperfuse has an ultra-low-cost of fewer than 20 cents, weighs only two grams and is, therefore, field-portable. The paper fuse could be the tool that helps detect and end malaria in low-income countries in the near future.

– Mayan Derhy

Photo: Flickr