Should African leaders pay taxes?

Africa is now facing the reality of financial independence right in the eye. Whether one is in denial or not the truth is that Africa should fend for herself and it does have resources to sustain it. This is backed by many reports that point out Africa's many resources, more than enough to make her financially independent of donors.

Caroline Kende Robb writing for Think Africa claims that Africa has incredible resource wealth, but if it is to reap the benefits, there must be a change of attitude amongst governments, corporations and the international community.

Now is a good time to be optimistic about Africa. The continent's global influence is growing after a decade of strong growth; the roots of macro-economic stability and democracy are sinking deeper across the continent. Dynamic civil societies are keeping governments on their toes, and government policy is improving. Africa is increasingly being recognised today for its dynamism and creativity.

However, Africa still faces major challenges too. A decade of highly impressive growth has not brought comparable improvements in health, education and nutrition; in many countries, the gap between rich and poor has only widened; and Africa must create jobs fast enough to keep pace with the growth of its young and growing workforce.

We have seen elsewhere how frustration and anger over corruption and unresponsive governments can create dangerous social and political environments.

To head off these pressures, the Africa Progress Panel believes that African governments must strengthen health and education systems through more efficient and equitable public spending, with a greater focus on gender disparities. African governments must also remove two major obstacles to development – the lack of infrastructure and energy.

To this end, the wise management of Africa's incredible natural wealth is a high priority.

By some estimates, the continent holds as much as 30% of global mineral reserves, and even higher proportions of the world's gold, platinum, diamonds and manganese.

Meanwhile, new exploration continues to reveal much larger reserves than previously known. Africa's natural resource windfall could change the face of the continent. In Liberia alone, iron ore and petroleum could generate an extra US$1.7 billion per year, equal to 148% of the country's 2011 GDP.

However, Africa and its partners will miss this opportunity to transform the lives of future as well as present generations if they carry on with business as usual. This danger was revealed in stark detail by the Equity in Extractives report released earlier this year by the Africa Progress Panel.

Africa's natural resource wealth rightly belongs to the continent's citizens, but these citizens are being robbed of its benefits by revenue diversion, corruption, jobless growth, and rising inequality.

In oil-rich Equatorial Guinea, for example, the economy has grown by an average of 17% a year over the last decade, meaning its GDP per capita is now higher than Poland's. Yet three-quarters of the population still live in poverty, and child death rates are among the highest in the world.

As a starting point, African governments should adopt national strategies that set the terms on which their natural resources will be developed and link these strategies to plans for poverty reduction and inclusive growth.

These strategies must identify extractive projects that can generate more jobs through linkages with the local economy. Processing natural resources before export can also bring extra value. Africa cannot build dynamic equitable growth while extractive projects operate within enclaves.

The responsibility of seeing Africa an independent continent doesn't mean the elite are exempted from the job. In Africa, it's a taboo to see a leader of the nation paying taxes.

To my surprise, my experience in Europe and USA proved contrary. Her majesty Queen Elizabeth pays taxes.

In 1992, The Queen volunteered to pay income tax and capital gains tax, and since 1993 her personal income has been taxable as for any other taxpayer. The Queen has always been subject to Value Added Tax and pays local rates on a voluntary basis.

President Barak Obama pays tax and his returns are published. The Internal Revenue Service makes sure the returns are submitted in time and are credible.

Both leaders (Queen Elizabeth and President Obama) come from very rich countries and yet they pay taxes, yet Africa, a continent that is begging from these countries has leaders who cannot pay tax and are comfortable with such status.

This question nagging my little brain is; why is it that in Africa we don't see the goodness of being exemplary and serving our people with pride?

Think of African governments where in some instances we can have over 300 members of parliament and all of them import vehicles duty free.

According to reports, President Barak Obama and his wife, Michelle, paid more than US$93,000 in federal taxes last year on an adjusted gross income of more than US$477,000, according to tax returns released by the White House.

The current president of Tanzania Mr John Magufuli has set a revolutionary tone to all African leaders. His stance against corruption and economic recovery has shown that Africa is able to stand on its own by standing on 'viable principles'.

Mr Magufuli was nicknamed "The Bulldozer" when he was a minister for his energetic road-building drive and reputation for honesty as minister; he stood on promises to boost economic performance and, like the opposition, fight corruption.

Upon ascending to power Mr Magufuli has made so many changes in his administration, some of them include:Using his official car when going to parliament instead of going by plane a distance of 600km from Dar er salaam to Dodoma.

He has reduced the size of the presidential convoy, even reduced the size of presidential delegation that travels with him.

He chose a Prime Minister who is not popular in Tanzania, a man with reputation for hard work and no corruption. All those who were salivating for the position were left wondering.

After President Magufuli visited the Ministry of Finance and Muhimbii Hospital without announcing, it is said that officials from the two institutions are now the most efficient. No loads are missing, things are done quickly.

When he was confirmed as winner people started congratulating him and wanting to bring gifts to his place he turned them back, saying he will receive all congrats over the phone, nobody should visit him.

All individuals/firms that bought state companies that were privatized but haven't done anything (20yrs later) are to either revive the industries immediately or hand them back to the government.

My worry is that President Magufuli may start as a revolutionary leader only to end up a villain. People will start sabotaging him and his stance against corruption and interest to revive the economy may fade. I am very sure that he will soon be paying tax so as to set example for the people of Tanzania and the whole continent of Africa.

I feel if African leaders were the first to pay taxes, it would encourage the citizens to do the same and the plundering of resources would have been reduced by the executive.

A good leader leads by example and shares the pain with his or her people. It is time for the mother continent to jealously account for its resources to push for both economic growth and infrastructure development.