Sub-Saharan African countries should leverage on revenues generated from natural resources like minerals and hydrocarbons to tame economic shocks linked to COVID-19 pandemic, a lobby group said on Friday.
Alvin Mosioma, executive director of Nairobi-based Tax Justice Network Africa (TJNA) said that revenue accrued from the extractive industry could be used to plug budgetary shortfalls in the continent during the pandemic era.
“In view of the pressure on governments to mobilize financial resources to mitigate the adverse impact of COVID-19, the extractive sector presents the strategic potential to generate the required resources,” Mosioma said in a statement issued in Nairobi.
He said that COVID-19 related economic slowdown could undermine provision of critical services in Africa including health, education and clean water, adding that the continent’s abundant natural resources have the potential to provide a respite.
Statistics from African Development Bank (AfDB) indicate that poverty has increased in the continent due to disruptions occasioned by the pandemic.
The lender said that COVID-19 might push an additional 28.2 to 49.2 million Africans into extreme poverty, thereby undermining their ability to contribute to the continent’s transformation agenda.
Mosioma said that declining foreign aid combined with a high debt burden should prompt African governments to strengthen home-grown sources of income.
“African countries should optimise domestic resource mobilization and leverage on the extractive sector to drive inclusive and sustainable growth,” said Mosioma.
He said that governments should promote transparency and prudent management of revenue generated from natural resources to ensure that benefits trickle to the grassroots.
Mosioma said that a vibrant regulatory environment is key to minimize loss of revenue generated from minerals, oil and gas in Africa.
“Citizen participation is key to promote governance in the extractive sector and ensure export earnings are ploughed back to the continent to cushion the vulnerable population from COVID-19 shocks,” said Mosioma.
He said that African governments should reimagine policies that underpin management of the extractive sector to ensure it can withstand future shocks like pandemics.